November 16, 2012 at 08:53 AM EST
Compass Point Starts TD Ameritrade with a “Neutral” Rating (AMTD)

On Friday analysts at Compass Pointed iniated coverage on online brokerage firm TD Ameritrade Holding Corp. (AMTD).

The analysts start AMTD at a “Neutral” rating with a price target of $17. The target is a +10.3% increase from Thursday’s closing price of $15.41.

Compass Point commented, “TD Ameritrade’s strong organic growth and capital activity set it apart from its online broker peers, but the company’s earnings remain primarily levered to interest rates, and absent any meaningful, sustainable improvement, EPS growth and AMTD shares will likely remain relatively muted, in our view. That said, despite a challenging retail environment, we fully expect top-tier asset gathering to continue, and revenues could benefit from increased volatility around January’s fiscal cliff deadline. Furthermore, management has historically been active in returning capital to shareholders, and although buyback activity may be slowing, we expect continued cash flow generation to provide flexibility to pay a special dividend or become more aggressive through M&A later on.”

TD Ameritrade shares were flat in premarket trading on Friday.

The Bottom Line
Shares of TD Ameritrade (AMTD) have a 2.34% dividend yield, based on last night’s closing stock price of $15.41. The stock has technical support in the $14 price area. If the shares can firm up, we see overhead resistance around the $17-$18 price levels.

TD Ameritrade Holding Corp. (AMTD) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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