Ally Financial Stock: Investment Insights & Analysis
Table of Contents
Ally Financial Inc. (NYSE: ALLY) leads in the automotive finance sector. It offers financial services like retail installment sales contracts, loans, and operating leases. The company has changed from a traditional bank to a digital financial services provider. It focuses on customer needs and uses technology in new ways1.
Ally has a wide range of services, including automotive finance, insurance, and mortgage finance. It’s known as a top online bank for tech-savvy customers. With a strong digital platform, Ally uses technology to improve customer experiences and make operations smoother. This approach has led to strong performance and growth potential1.
Key Takeaways
- Ally Financial is a leading player in the automotive finance industry, offering a wide range of financial services.
- The company has transitioned from a traditional bank to a digitally-focused financial services provider, with a strong emphasis on customer-centric strategies and innovative technology.
- Ally’s diverse portfolio includes automotive finance, insurance, mortgage finance, and corporate finance operations, positioning it as a prominent online bank.
- The company’s robust digital platform has enabled it to enhance customer experiences and streamline operations, driving strong performance metrics and growth potential.
- Ally Financial is listed on the New York Stock Exchange with a current price of $39.33 USD, showcasing a decrease of 3.931.
Introduction to Ally Financial
Company Overview
Ally Financial Inc., once known as GMAC Inc., is a top digital financial services company in Detroit, Michigan2. It started in 1919 as the General Motors Acceptance Corporation (GMAC) to help finance General Motors2. Over time, Ally Financial grew from just financing cars to offering many financial services in the U.S., Canada, and Bermuda.
Historical Background
Ally Financial began in 1919 as GMAC2. By 1924, it financed its 4 millionth vehicle2. By 1939, it created the Motors Insurance Corporation (MIC)2. The company kept growing, hitting big milestones like financing its 75 millionth vehicle in 19772 and reaching $1 trillion in financing for 150 million vehicles by 20012. In 2010, it changed its name to Ally Financial Inc. to focus more on digital solutions.
Now, Ally Financial is a company that offers many financial services with a big focus on digital solutions3. It has a market value of $12.053 billion3 and is quite volatile with a beta of 1.393. Its financials are strong, with a P/E ratio of 17.053, an EPS of $2.323, and a forward dividend yield of 2.93%3.
Recently, Ally Financial has grown and offered more services4. In 2023, it helped finance and lease cars for 4.1 million customers and started 1.2 million car loans4. The company also sold over 5 million vehicles, including 505,000 through its SmartAuction online marketplace4. Ally Financial is also known for its support of diversity and inclusion, being named one of the Best Places to Work for Disability Inclusion in 20224.
“Ally Financial is a leading digital financial services company that has evolved from its automotive finance roots to become a diversified provider of innovative products and services.”
Ally Financial’s Core Business Segments
Ally Financial is a top financial services company. It has several key business areas. Each one adds to its wide range of services for consumers and businesses3.
Automotive Finance Operations
Automotive Finance is a big part of Ally Financial. It helps consumers and car dealers with financing. This includes loans, leases, and services for dealers and vehicle remarketing3.
Insurance Operations
Ally’s Insurance offers many insurance products, mainly through car dealers. They provide vehicle service contracts, GAP products, and insurance for dealers’ cars3.
Mortgage Finance Operations
Ally Financial’s Mortgage Finance handles consumer mortgage loans. They buy jumbo and low-to-moderate income loans from others and offer mortgages directly to consumers3.
Corporate Finance Operations
Corporate Finance at Ally gives loans to middle market companies. They offer loans for businesses in healthcare and real estate. Plus, they have commercial banking services3.
| Key Financial Metrics | Data |
|---|---|
| Market Cap (intraday) | $12.053B3 |
| Profit Margin | 12.14%3 |
| Revenue (ttm) | $6.78B3 |
| Net Income Avi to Common (ttm) | $714M3 |
| Total Cash (mrq) | $7.38B3 |
Ally Financial offers a wide range of services. From car financing and insurance to mortgages and corporate finance. This shows how the company meets its clients’ financial needs1.
Competitive Advantages of Ally Financial
Ally Financial is a top name in financial services. It has many key advantages that help it stand out5. One big plus is its focus on digital services. This lets the company save money and give customers better experiences5. Ally also shines because of its strong brand, built on putting customers first and using new tech.
Ally knows a lot about car finance, which is another big plus6. This focus lets it offer a wide range of financial services. This means more ways to make money and less risk6. Plus, being efficient and customer-focused helps Ally keep its customers happy and loyal, making it even stronger.
Ally is also great at following rules and managing risks5. The company sticks to the best practices and stays ahead of risks. This keeps it stable and able to last a long time5.
So, Ally Financial has many things going for it. Its digital approach, strong brand, varied services, efficiency, focus on customers, and risk management make it a big player in finance.
Financial Performance Analysis
Ally Financial is a top name in financial services, showing strong financial health with steady revenue and profits7. In the last year, it made $714.00 million in earnings and $6.78 billion in revenue. This shows a profit margin of 12.14% and a return on equity of 6.02%7.
Ally Financial’s balance sheet looks strong, with $7.38 billion in cash as of the latest quarter7. The company manages its debt well, keeping a healthy debt-to-equity ratio. This helps it face economic ups and downs and invest in growth7.
Revenue and Profitability Trends
Ally Financial has seen steady revenue growth, with a market value of $12.67 billion7. Its P/E ratio is 17.5x and P/S ratio is 1.8x, showing it’s a good value7. The company’s EPS is $2.34, showing it can grow profits7.
Balance Sheet Strength
Ally Financial has a solid balance sheet, with a debt-to-equity ratio of 138.0%, showing its financial health and liquidity7. Its gross margin is 100.00%, and net profit margin is 10.54%, making its financial position even stronger7.
| Financial Metric | Value |
|---|---|
| Market Capitalization | $12.67 billion7 |
| Earnings | $714.00 million7 |
| Revenue | $6.78 billion7 |
| Price-to-Earnings (P/E) Ratio | 17.5x7 |
| Price-to-Sales (P/S) Ratio | 1.8x7 |
| Earnings per Share (EPS) | $2.347 |
| Debt-to-Equity Ratio | 138.0%7 |
| Gross Margin | 100.00%7 |
| Net Profit Margin | 10.54%7 |
Ally Financial’s strong financial performance and balance sheet make it ready for more growth and stability in the financial services field7.
Ally Financial Stock: Valuation and Metrics
Ally Financial Inc. (NASDAQ: ALLY) is a top financial services company. It offers products like automotive financing, insurance, and mortgage lending. When looking at the company’s stock, its valuation and key metrics are crucial8.
Intrinsic Value Calculation
Our analysis shows the intrinsic value of one Ally Financial stock is $79.698. This is under the Base Case scenario. The stock is undervalued by about 51% compared to its current price of $39.338. This value is the average of the discounted cash flow and relative valuation8.
Key Financial Ratios
Ally Financial’s financial ratios are impressive. The company’s P/E ratio is 17.65, and its forward P/E is 7.51. This means the stock is cheaper than its expected earnings8. The P/B ratio of 1.08 and P/S ratio of 1.43 also show the stock is undervalued8.
Looking closer at Ally Financial’s metrics, the PEG ratio is 0.6x. This means the stock is cheaper than its growth rate9. The company has a market cap of US$12.67 billion. Analysts predict a 14.6% increase in the stock price to US$46.90 in a year9.
“Ally Financial’s valuation metrics suggest that the stock is significantly undervalued and presents a compelling investment opportunity for those seeking exposure to the financial services sector.”
Ally Financial’s stock looks undervalued with strong fundamentals and growth potential. Investors should think about these metrics when considering the company as an investment89.
Ally Financial Stock: Growth Prospects
Ally Financial is looking good for growth. It’s focusing on digital changes, offering many financial services, and doing well in car finance and online banking10. The company is great at adapting to what customers want and using tech to make things better for them11. Plus, it’s aiming to grow its market share and keep credit quality high, which looks good for its future10.
Ally Financial’s stock (ALLY) has jumped about 70% in a year, even though it dropped 20% since Berkshire Hathaway likely started investing in early 202211. The digital banking world is expected to grow, with more people using online banking from 208 million in 2023 to 216.8 million in 202511. Ally is making the most of this trend, adding 3 million new customers in the last quarter of 2023, a 13% jump from the year before, and bringing in $4.6 billion in retail deposits, making a total of $142.3 billion11.
Ally’s car loan business is also doing well, with 13.8 million car loan applications in 2023, the most in five years, and a 30% approval rate, the lowest in five years11. The company made $9.6 billion in auto loans, just like before11. Also, Ally’s stock is priced fairly, with a price-to-book ratio over 1, which is lower than many other bank stocks, offering a chance for investors to make money11. The dividend yield for Ally stock is 3.2%, more than double the average S&P 500 yield, making it an attractive choice for income11.
Overall, Ally Financial looks promising with its focus on digital changes, diverse services, and strong spots in key areas10. Investors might like the company’s value, dividend yield, and growth potential when thinking about adding Ally Financial stock to their portfolios.
| Metric | Value |
|---|---|
| Current Price | $39.56 USD |
| Market Performance | -1.38 (-3.37%) |
| After-market Price | $39.57 (+0.01, 0.03%) |
| Outstanding Shares | 5,974,794 |
| Average Price Target | $45.44 |
| Highest Price Target | $51.00 |
| Lowest Price Target | $37.00 |
| Upside to Average Target | 10.99% |
| Broker Recommendations | Range from Strong Buy to Strong Sell |
| Strong Buy Recommendations | 36.84% of total |
| Buy Recommendations | 15.79% of total |
| Industry Rank | Financial – Consumer Loans (76 out of 251) |
| Current Quarter EPS Estimate | 0.98 |
ally financial stock
Ally Financial’s stock (NYSE: ALLY) is now at $39.33 per share, with a market value of $12.05 billion12. Over the past year, the stock has shown mixed results, with a YTD return of -2% and a 1-year return of +9%12. Investors should keep an eye on Ally’s financial health, competitive edge, and growth plans to gauge its future potential.
The stock’s price has changed over time. Dividends per share went up from $0.76 in 2020 to $0.88 in 2021, and are expected to be $0.90 in 202412. The company has paid out big dividends, like $0.40 in 2017, $0.68 in 2019, and $1.20 per share in 2021, aiming for $0.90 in 202412.
| Year | Dividends per Share |
|---|---|
| 2016 | $0.16 |
| 2020 | $0.76 |
| 2021 | $1.20 |
| 2024 (Projected) | $0.90 |
Dividends per share jumped from 2020 to 2021 by $0.12, and total payments went up from 2019 to 2021 by $0.52 per share12. This shows Ally Financial’s dedication to giving value back to its shareholders.
Investors should watch Ally Financial’s financial health, competitive edge, and growth plans closely12. With a smart approach and understanding of the market, investors can spot opportunities in Ally Financial’s stock.
Risk Factors and Challenges
Ally Financial is a top financial services company facing big risks and challenges13. One big worry is the changing car industry, key to Ally’s finance work13. Since cars make up 45% of its assets14, changes in car demand could hit hard.
Ally also faces tough competition from fintech and traditional banks13. This competition might cut into its profits and market share. Ally must keep innovating to stay ahead.
Changes in rules could also be a big problem for Ally13. New laws might affect how Ally does business, leading to extra costs to follow the rules.
Lastly, Ally’s success depends a lot on the economy, which has been unstable lately13. With more bad loans, Ally is at risk from economic ups and downs14. It needs strong risk management to handle these risks.
To overcome these hurdles, Ally must be flexible, keep a solid financial base, and manage risks well1314. Doing these things right is key to its future growth and profits.
| Key Risk Factors | Potential Impact |
|---|---|
| Evolving Automotive Industry Landscape | Disruptions to Ally’s core automotive finance segment |
| Increased Competition from Fintech and Traditional Banks | Pressure on profitability and market share |
| Regulatory Changes | Compliance challenges and potential business model adjustments |
| Macroeconomic Volatility | Exposure to credit risks and sensitivity to economic conditions |
“Careful risk management and the ability to adapt to industry changes will be crucial for Ally’s continued success.”
Analyst Recommendations and Price Targets
Ally Financial’s stock has a consensus price target of $45.69, which is about 16% higher than now15. Analysts are pretty good at predicting revenue and net income growth, with an average accuracy of 14% and 27% respectively15. Most analysts think Ally Financial’s stock is a good investment, giving “Buy” or “Hold” ratings15.
Analysts are very positive about Ally Financial. The stock is at $39.56, with a Zacks Rank of 1 – Strong Buy10. They predict a price target of $45.44, with a high of $51.00 and a low of $37.00, offering a 11% upside10. Of the 19 analysts covering the stock, 7 have given Strong Buy ratings, and 3 have recommended Buy, making up over half of the coverage10.
It’s important for investors to watch for changes in analyst opinions and price targets on Ally Financial15. The company’s strong finances, competitive edge, and growth plans suggest it could keep getting positive reviews and possibly beat the market15.
Ally Financial’s competitors have different price targets, with some offering much higher potential gains. For example, S35 could go up by 75%, S41 by 31%, and 600318 by 165%15. Others like FCFS, KTC, AXP, and SAK have more modest upside potential15. These differences show the market’s varied views and the importance of looking at each company’s strengths and challenges.
Dividend Policy and Shareholder Returns
Ally Financial is dedicated to rewarding its shareholders with a steady dividend policy and strategic share buybacks16. They pay a quarterly dividend of $0.30 per share, giving an annual yield of 2.93%16. This means investors get $2.93 in dividends for every $100 invested in Ally Financial stock16.
The company’s payout ratio is 58.2%, showing a balance between giving back to shareholders and staying financially stable16. Ally has increased dividends for the past year, showing its commitment to keeping shareholder returns strong16.
Ally Financial also buys back shares, showing its dedication to boosting shareholder value16. The company’s shareholder yield, including dividends, buybacks, and debt paydown, is a key way to measure investor returns16.
Ally Financial’s dividend yield and how it compares to others in the industry and globally gives investors important insights16. Its dividend yield ranks well, making its dividends more attractive16.
Looking forward, Ally Financial’s decisions on dividends and capital will be key to its ability to keep generating strong returns for shareholders17. Analysts predict Ally’s earnings per share will jump by 175.6% over the next three years, possibly lowering the payout ratio to 21%17. But, the recent drop in earnings per share could affect future dividend growth17.
Even with potential challenges, Ally Financial’s steady dividend policy and consistent returns may still draw investors17. Investors should keep an eye on Ally’s dividend payments, growth, and overall returns to see if they’re a good investment16.
Over the past five years, Ally Financial’s stock price has risen by 42%, which is less than the market average18. But, recent investors have seen a 22% increase in share price, hinting at future growth18. The company’s total shareholder return, including dividends, has been 65% over five years, showing the value of its dividend policy and capital strategies18.
“Ally Financial’s stable dividend policy could attract more investor interest compared to companies with inconsistent dividend approaches.”
In conclusion, Ally Financial’s focus on dividends and share buybacks is a big part of its appeal to investors16. While there are concerns about its recent financials and future dividend growth, Ally’s history of steady dividends and smart capital use may still draw in long-term investors looking for reliable returns17.
Insider Trading and Institutional Ownership
Many institutional investors own a big part of Ally Financial’s shares19. This shows they believe in Ally’s future. Also, Ally’s insiders don’t trade much, showing they think the stock is a good deal or will do well20.
Some top people at Ally Financial have bought or sold shares20. DEBRUNNER DAVID JVP, the CAO, sold some shares. Morais Diane E., the President of Ally Bank, and Timmerman Douglas R., the President of Auto Finance, got stock options20. The CEO, RHODES MICHAEL GEORGE, also owns a lot of Ally shares20.
Institutions own most of Ally Financial’s shares, with 81.8%19. The top 25 shareholders hold 63.28% of the company19. This means the investment world sees Ally Financial as a good long-term choice19.
In summary, Ally Financial has strong support from investors. With little insider trading and a lot of institutional ownership, the market sees it as a promising investment2019.
Conclusion
Ally Financial is a strong choice for investing in the financial sector. It has a solid track record, stands out in the market, and is growing21. Its focus on digital services, varied business areas, and leadership in car finance make it appealing to investors21. Even with some risks in the industry, Ally is ready for the future with smart risk handling and a focus on customer satisfaction21.
Investors should keep an eye on Ally Financial’s progress and plans. The stock’s current price of $39.5622 and its steady dividends and buybacks21 look good for investors21. With its digital edge, varied income sources, and top spot in car finance, Ally is set for lasting growth and value for shareholders21.
To sum up, Ally Financial’s ally financial stock summary and ally financial investment outlook are strong reasons to invest. Its solid base, market edge, and growth chances make it a great pick for a varied portfolio.
FAQ
What is Ally Financial Inc.?
Ally Financial Inc. is a big name in the car finance world. It offers services like car loans, leases, and financing for dealers. The company has changed from a traditional bank to a digital financial service provider. It focuses on customer needs and uses new technology.
When was Ally Financial Inc. founded and where is it based?
Ally Financial Inc., once known as GMAC Inc., started in 1919 in Detroit, Michigan. Now, it’s a digital financial service company. It serves the U.S., Canada, and Bermuda with various products and services.
What are Ally Financial’s core business segments?
Ally Financial’s main areas include car finance, insurance, mortgage finance, and corporate finance.
What are Ally Financial’s key competitive advantages?
Ally Financial stands out with its focus on digital services, strong brand, and car finance expertise. It offers many financial services, is cost-efficient, and puts customers first. The company uses technology innovatively and follows strict rules to manage risks.
How has Ally Financial’s financial performance been?
Ally Financial has shown strong financial health. Its revenue and profits have grown steadily. It keeps a good profit margin and return on equity.
What is the intrinsic value of Ally Financial’s stock?
The analysis shows Ally Financial stock’s true value could be .69 under the Base Case scenario. This is about 51% higher than its current price of .33.
What are Ally Financial’s key financial ratios?
Ally Financial’s important ratios include a P/E ratio of 17.65 and a forward P/E of 7.51. Its P/B ratio is 1.08 and P/S ratio is 1.43. These suggest the stock is undervalued.
What are Ally Financial’s growth prospects?
Ally Financial looks promising for growth. It’s focusing on digital changes, offering various financial services, and has a strong position in car finance and online banking.
How has Ally Financial’s stock performed?
Ally Financial’s stock (NYSE: ALLY) is at .33 per share, with a market value of .05 billion. Its performance has been mixed, with a YTD return of -2% and a 1-year return of +9%.
What are the key risk factors and challenges facing Ally Financial?
Ally Financial faces risks like changes in the car industry, competition from fintech and traditional banks, new rules, and economic conditions affecting spending.
What are the latest analyst recommendations for Ally Financial’s stock?
Analysts recommend Ally Financial stock with a price target of .69, a 16% increase from now. Most analysts say “Buy” or “Hold” the stock.
Does Ally Financial pay dividends and repurchase shares?
Yes, Ally Financial gives back to shareholders with dividends and buys back shares. It pays a quarterly dividend of
FAQ
What is Ally Financial Inc.?
Ally Financial Inc. is a big name in the car finance world. It offers services like car loans, leases, and financing for dealers. The company has changed from a traditional bank to a digital financial service provider. It focuses on customer needs and uses new technology.
When was Ally Financial Inc. founded and where is it based?
Ally Financial Inc., once known as GMAC Inc., started in 1919 in Detroit, Michigan. Now, it’s a digital financial service company. It serves the U.S., Canada, and Bermuda with various products and services.
What are Ally Financial’s core business segments?
Ally Financial’s main areas include car finance, insurance, mortgage finance, and corporate finance.
What are Ally Financial’s key competitive advantages?
Ally Financial stands out with its focus on digital services, strong brand, and car finance expertise. It offers many financial services, is cost-efficient, and puts customers first. The company uses technology innovatively and follows strict rules to manage risks.
How has Ally Financial’s financial performance been?
Ally Financial has shown strong financial health. Its revenue and profits have grown steadily. It keeps a good profit margin and return on equity.
What is the intrinsic value of Ally Financial’s stock?
The analysis shows Ally Financial stock’s true value could be $79.69 under the Base Case scenario. This is about 51% higher than its current price of $39.33.
What are Ally Financial’s key financial ratios?
Ally Financial’s important ratios include a P/E ratio of 17.65 and a forward P/E of 7.51. Its P/B ratio is 1.08 and P/S ratio is 1.43. These suggest the stock is undervalued.
What are Ally Financial’s growth prospects?
Ally Financial looks promising for growth. It’s focusing on digital changes, offering various financial services, and has a strong position in car finance and online banking.
How has Ally Financial’s stock performed?
Ally Financial’s stock (NYSE: ALLY) is at $39.33 per share, with a market value of $12.05 billion. Its performance has been mixed, with a YTD return of -2% and a 1-year return of +9%.
What are the key risk factors and challenges facing Ally Financial?
Ally Financial faces risks like changes in the car industry, competition from fintech and traditional banks, new rules, and economic conditions affecting spending.
What are the latest analyst recommendations for Ally Financial’s stock?
Analysts recommend Ally Financial stock with a price target of $45.69, a 16% increase from now. Most analysts say “Buy” or “Hold” the stock.
Does Ally Financial pay dividends and repurchase shares?
Yes, Ally Financial gives back to shareholders with dividends and buys back shares. It pays a quarterly dividend of $0.30 per share, for a 2.93% yield. It also has a share buyback program.
Who are the major investors in Ally Financial’s stock?
Many institutional investors own a big part of Ally Financial’s shares. The company’s insiders trade very little, showing they think the stock is undervalued or are optimistic about its future.
.30 per share, for a 2.93% yield. It also has a share buyback program.
Who are the major investors in Ally Financial’s stock?
Many institutional investors own a big part of Ally Financial’s shares. The company’s insiders trade very little, showing they think the stock is undervalued or are optimistic about its future.
Source Links
- Ally Financial Inc (NYSE:ALLY)
- History of Ally | Ally
- Ally Financial Inc. (ALLY) Stock Price, News, Quote & History – Yahoo Finance
- Ally Financial
- Decoding Ally Financial Inc (ALLY): A Strategic SWOT Insight
- Is Ally Financial a No-Brainer Dividend Stock for This Bull Market? | The Motley Fool
- Ally Financial (NYSE:ALLY) – Stock Price, News & Analysis – Simply Wall St
- Ally Financial Inc. (ALLY) Valuation Measures & Financial Statistics
- Ally Financial (NYSE:ALLY) Stock Valuation, Peer Comparison & Price Targets – Simply Wall St
- What is the current Price Target and Forecast for Ally Financial (ALLY)
- Where Will Ally Stock Be in 3 Years? | The Motley Fool
- Ally Financial (NYSE: ALLY) Dividend & Stock Information
- 4 Things You Need to Know if You Buy Ally Financial Stock Today | The Motley Fool
- Is Ally Financial Stock a Buy? | The Motley Fool
- Ally Financial Inc (NYSE:ALLY)
- Ally Financial Inc. (ALLY) Dividend Date & History | Koyfin
- Ally Financial (NYSE:ALLY) Has Announced A Dividend Of $0.30
- Ally Financial (NYSE:ALLY) Shareholders Have Earned a 11% CAGR Over the Last Five Years
- Ally Financial Inc. Insider Trading & Ownership Structure – Simply Wall St
- ALLY Insider Trading Activity – Ally Financial Inc.
- Ally Financial Stock: Buy, Sell, or Hold? | The Motley Fool
- Ally Financial – 10 Year Stock Price History | ALLY
