Critical Survey: American Express (AXP) versus Its Peers

American Express (NYSE: AXP) is one of 29 public companies in the “Nondepository credit institutions” industry, but how does it contrast to its peers? We will compare American Express to related businesses based on the strength of its analyst recommendations, dividends, profitability, institutional ownership, risk, valuation and earnings.

Volatility & Risk

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American Express has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, American Express’ peers have a beta of 1.49, suggesting that their average stock price is 49% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for American Express and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Express 1 14 13 0 2.43
American Express Competitors 157 721 967 41 2.47

American Express presently has a consensus target price of $103.78, indicating a potential upside of 10.27%. As a group, “Nondepository credit institutions” companies have a potential downside of 4.40%. Given American Express’ higher probable upside, analysts plainly believe American Express is more favorable than its peers.

Valuation & Earnings

This table compares American Express and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
American Express $33.47 billion $2.74 billion 16.03
American Express Competitors $6.70 billion $705.01 million 11.60

American Express has higher revenue and earnings than its peers. American Express is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

American Express pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. American Express pays out 23.9% of its earnings in the form of a dividend. As a group, “Nondepository credit institutions” companies pay a dividend yield of 2.7% and pay out 35.6% of their earnings in the form of a dividend. American Express has increased its dividend for 6 consecutive years.

Insider & Institutional Ownership

84.1% of American Express shares are owned by institutional investors. Comparatively, 52.8% of shares of all “Nondepository credit institutions” companies are owned by institutional investors. 0.2% of American Express shares are owned by insiders. Comparatively, 16.1% of shares of all “Nondepository credit institutions” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares American Express and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Express 8.08% 26.00% 3.12%
American Express Competitors 15.24% 65.06% 1.59%

Summary

American Express peers beat American Express on 8 of the 15 factors compared.

About American Express

American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. It operates through four segments: U.S. Consumer Services, International Consumer and Network Services, Global Commercial Services, and Global Merchant Services. The company's products and services include charge and credit card products, as well as other payment and financing products; network services; expense management products and services; travel-related services; and stored value/prepaid products. Its products and services also comprise merchant acquisition and processing, servicing and settlement, merchant financing, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. The company sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through online applications, direct mail, in-house teams, third-party vendors, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.

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