AMERICAN EXPRESS CO (AXP)
US0258161092 - Common Stock
We assign a fundamental rating of 5 out of 10 to AXP. AXP was compared to 51 industry peers in the Consumer Finance industry. AXP has a medium profitability rating, but doesn't score so well on its financial health evaluation. AXP is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
AXP had positive earnings in the past year.
In the past year AXP had a positive cash flow from operations.
AXP had positive earnings in each of the past 5 years.
Each year in the past 5 years AXP had a positive operating cash flow.
1.2 Ratios
AXP has a better Return On Assets (3.29%) than 78.43% of its industry peers.
The Return On Equity of AXP (30.83%) is better than 96.08% of its industry peers.
With a decent Return On Invested Capital value of 3.54%, AXP is doing good in the industry, outperforming 60.78% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AXP is below the industry average of 6.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 30.83% | ||
| ROIC | 3.54% |
ROA(3y)3.53%
ROA(5y)3.11%
ROE(3y)31.69%
ROE(5y)27.4%
ROIC(3y)3.85%
ROIC(5y)3.4%
1.3 Margins
Looking at the Profit Margin, with a value of 13.17%, AXP is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
AXP's Profit Margin has declined in the last couple of years.
AXP's Operating Margin of 17.01% is fine compared to the rest of the industry. AXP outperforms 64.71% of its industry peers.
In the last couple of years the Operating Margin of AXP has declined.
The Gross Margin of AXP (63.13%) is better than 64.71% of its industry peers.
AXP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.01% | ||
| PM (TTM) | 13.17% | ||
| GM | 63.13% |
OM growth 3Y12.37%
OM growth 5Y-3.17%
PM growth 3Y15.47%
PM growth 5Y-4.99%
GM growth 3Y-4.54%
GM growth 5Y-1.9%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AXP is destroying value.
The number of shares outstanding for AXP has been reduced compared to 1 year ago.
AXP has less shares outstanding than it did 5 years ago.
AXP has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.77, we must say that AXP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AXP (0.77) is comparable to the rest of the industry.
AXP has a debt to FCF ratio of 8.08. This is a slightly negative value and a sign of low solvency as AXP would need 8.08 years to pay back of all of its debts.
The Debt to FCF ratio of AXP (8.08) is comparable to the rest of the industry.
A Debt/Equity ratio of 6.43 is on the high side and indicates that AXP has dependencies on debt financing.
With a Debt to Equity ratio value of 6.43, AXP is not doing good in the industry: 82.35% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.43 | ||
| Debt/FCF | 8.08 | ||
| Altman-Z | 0.77 |
ROIC/WACC0.51
WACC6.93%
2.3 Liquidity
AXP has a Current Ratio of 0.76. This is a bad value and indicates that AXP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of AXP (0.76) is comparable to the rest of the industry.
AXP has a Quick Ratio of 0.76. This is a bad value and indicates that AXP is not financially healthy enough and could expect problems in meeting its short term obligations.
AXP has a Quick ratio (0.76) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 27.66% over the past year.
Measured over the past years, AXP shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.90% on average per year.
The Revenue has grown by 16.48% in the past year. This is quite good.
Measured over the past years, AXP shows a quite strong growth in Revenue. The Revenue has been growing by 9.45% on average per year.
EPS 1Y (TTM)27.66%
EPS 3Y43.93%
EPS 5Y8.9%
EPS growth Q2Q38.75%
Revenue 1Y (TTM)16.48%
Revenue growth 3Y20.86%
Revenue growth 5Y9.45%
Revenue growth Q2Q3.44%
3.2 Future
The Earnings Per Share is expected to grow by 7.95% on average over the next years.
The Revenue is expected to grow by 7.63% on average over the next years.
EPS Next Y15.47%
EPS Next 2Y15.3%
EPS Next 3Y14.53%
EPS Next 5Y7.95%
Revenue Next Year9%
Revenue Next 2Y8.68%
Revenue Next 3Y8.56%
Revenue Next 5Y7.63%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 20.00, which indicates a rather expensive current valuation of AXP.
AXP's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AXP to the average of the S&P500 Index (28.60), we can say AXP is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.29, AXP is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AXP indicates a slightly more expensive valuation: AXP is more expensive than 62.75% of the companies listed in the same industry.
AXP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20 | ||
| Fwd PE | 16.29 |
4.2 Price Multiples
AXP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AXP is cheaper than 78.43% of the companies in the same industry.
AXP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.63 | ||
| EV/EBITDA | 12.97 |
4.3 Compensation for Growth
AXP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of AXP may justify a higher PE ratio.
AXP's earnings are expected to grow with 14.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.29
PEG (5Y)2.25
EPS Next 2Y15.3%
EPS Next 3Y14.53%
5. Dividend
5.1 Amount
AXP has a Yearly Dividend Yield of 1.16%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.06, AXP has a dividend in line with its industry peers.
With a Dividend Yield of 1.16, AXP pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
5.2 History
On average, the dividend of AXP grows each year by 9.36%, which is quite nice.
AXP has paid a dividend for at least 10 years, which is a reliable track record.
AXP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.36%
Div Incr Years2
Div Non Decr Years17
5.3 Sustainability
AXP pays out 20.60% of its income as dividend. This is a sustainable payout ratio.
AXP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.6%
EPS Next 2Y15.3%
EPS Next 3Y14.53%
AMERICAN EXPRESS CO
NYSE:AXP (5/17/2024, 7:04:00 PM)
After market: 242.59 -0.23 (-0.09%)242.82
+1.5 (+0.62%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap174.66B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20 | ||
| Fwd PE | 16.29 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.29
PEG (5Y)2.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 30.83% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.01% | ||
| PM (TTM) | 13.17% | ||
| GM | 63.13% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.43 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)27.66%
EPS 3Y43.93%
EPS 5Y
EPS growth Q2Q
EPS Next Y15.47%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)16.48%
Revenue growth 3Y20.86%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y