Analyzing American Express (AXP) and The Competition

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

Analyst Recommendations

This is a breakdown of recent ratings for American Express and its competitors, as reported 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 161 724 970 41 2.47

American Express currently has a consensus price target of $105.82, indicating a potential upside of 4.99%. As a group, “Nondepository credit institutions” companies have a potential downside of 5.86%. Given American Express’ higher possible upside, equities research analysts clearly believe American Express is more favorable than its competitors.

Profitability

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

Net Margins Return on Equity Return on Assets
American Express 8.79% 28.27% 3.27%
American Express Competitors 15.26% 65.14% 1.59%

Volatility & Risk

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

Insider & Institutional Ownership

84.1% of American Express shares are owned by institutional investors. Comparatively, 50.6% of shares of all “Nondepository credit institutions” companies are owned by institutional investors. 0.2% of American Express shares are owned by insiders. Comparatively, 19.3% 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 is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
American Express $33.47 billion $2.74 billion 17.17
American Express Competitors $6.70 billion $705.01 million 12.23

American Express has higher revenue and earnings than its competitors. American Express is trading at a higher price-to-earnings ratio than its competitors, 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 1.4%. 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 2.6% and pay out 35.6% of their earnings in the form of a dividend. American Express has increased its dividend for 6 consecutive years.

Summary

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

American Express Company Profile

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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