Over the last three years Ameriprise Financial, Inc. (NYSE:AMP) reduced its shares outstanding by more than 20%. In the last quarter alone, the company returned $488 million to shareholders through a combination of share repurchases and dividends.
Source: YCharts
A leading investment bank
Goldman Sachs Group Inc (NYSE:GS) enjoys a leading market position in the global investment banking industry. The company owns arguably the most valuable brand in the business and prides itself on providing its clients with access to some of the smartest people in the world of finance.
Goldman Sachs Group Inc (NYSE:GS) has a complex business model; large trading operations and a changing regulatory landscape mean that investors in the company are always exposed to a considerable amount of risk. But the business is firing on all cylinders lately. Earnings per share more than doubled on the back of a 30% increase in revenue during the last quarter.
The bank is trading at a price-to-book value ratio of 1.1, so even if it never returns to pre-financial crisis valuations it still has plenty of upside room from current valuation levels.
Goldman Sachs Group Inc (NYSE:GS) has been recurrently repurchasing stock, and in the last quarter the company repurchased 10.5 million shares and has a remaining authorization under its current repurchase program for 75.9 million more shares.
Source: YCharts
A high-quality credit card
The company is not particularly cheap, trading at a P/E ratio near 18, but the valuation isn’t excessive for such a high-quality company either. American Express Company (NYSE:AXP) is performing quite well with earnings per share increasing by 10% in the last quarter and credit performance remaining strong, as the net write-off rate was 2% during the quarter.
The board of directors has approved the repurchase of up to 150 million common shares back in March. The company has been actively repurchasing stock over the last few years and during the last quarter American Express Company (NYSE:AXP) reduced its share count by 5%.
Source: YCharts
Bottom line
Efficient capital allocation is crucial in the financial industry, deciding where money should be put to work in order to maximize its risk-adjusted return is of utmost importance. These three financial bellwethers are finding a compelling buying opportunity in their own shares, and by implementing buyback programs they are creating value for shareholders.
The article 3 Financial Powerhouses Showing You the Money originally appeared on Fool.com is written by Andrés Cardenal.
Andrés Cardenal owns shares of Berkshire Hathaway. The Motley Fool recommends American Express, Berkshire Hathaway, and Goldman Sachs. The Motley Fool owns shares of Berkshire Hathaway.
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