AMERICAN EXPRESS CO (AXP) Stock Fundamental Analysis
NYSE:AXP - New York Stock Exchange, Inc. - US0258161092 - Common Stock - Currency: USD
AXP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 52 industry peers in the Consumer Finance industry. While AXP is still in line with the averages on profitability rating, there are concerns on its financial health. AXP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AXP was profitable.
In the past year AXP had a positive cash flow from operations.
AXP had positive earnings in each of the past 5 years.
In the past 5 years AXP always reported a positive cash flow from operatings.
1.2 Ratios
AXP has a Return On Assets of 3.59%. This is in the better half of the industry: AXP outperforms 73.08% of its industry peers.
With an excellent Return On Equity value of 32.50%, AXP belongs to the best of the industry, outperforming 94.23% of the companies in the same industry.
With a Return On Invested Capital value of 3.70%, AXP perfoms like the industry average, outperforming 51.92% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AXP is significantly below the industry average of 10.31%.
The last Return On Invested Capital (3.70%) for AXP is above the 3 year average (3.64%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.59% | ||
| ROE | 32.5% | ||
| ROIC | 3.7% |
ROA(3y)3.36%
ROA(5y)3.17%
ROE(3y)30.79%
ROE(5y)28.26%
ROIC(3y)3.64%
ROIC(5y)3.45%
1.3 Margins
Looking at the Profit Margin, with a value of 13.95%, AXP is in the better half of the industry, outperforming 63.46% of the companies in the same industry.
In the last couple of years the Profit Margin of AXP has remained more or less at the same level.
AXP has a better Operating Margin (17.29%) than 65.38% of its industry peers.
AXP's Operating Margin has been stable in the last couple of years.
AXP has a better Gross Margin (61.84%) than 61.54% of its industry peers.
In the last couple of years the Gross Margin of AXP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.29% | ||
| PM (TTM) | 13.95% | ||
| GM | 61.84% |
OM growth 3Y-9.36%
OM growth 5Y-1.39%
PM growth 3Y-8.95%
PM growth 5Y-1.04%
GM growth 3Y-3.2%
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.
AXP has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AXP has less shares outstanding
The debt/assets ratio for AXP is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.84, we must say that AXP is in the distress zone and has some risk of bankruptcy.
AXP has a Altman-Z score (0.84) which is in line with its industry peers.
AXP has a debt to FCF ratio of 17.60. This is a negative value and a sign of low solvency as AXP would need 17.60 years to pay back of all of its debts.
AXP has a Debt to FCF ratio (17.60) which is in line with its industry peers.
AXP has a Debt/Equity ratio of 6.38. This is a high value indicating a heavy dependency on external financing.
AXP has a Debt to Equity ratio of 6.38. This is in the lower half of the industry: AXP underperforms 78.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.38 | ||
| Debt/FCF | 17.6 | ||
| Altman-Z | 0.84 |
ROIC/WACC0.48
WACC7.64%
2.3 Liquidity
AXP has a Current Ratio of 0.68. 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 Current ratio (0.68) which is comparable to the rest of the industry.
AXP has a Quick Ratio of 0.68. 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 (0.68) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.52% over the past year.
AXP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.27% yearly.
Looking at the last year, AXP shows a quite strong growth in Revenue. The Revenue has grown by 8.00% in the last year.
The Revenue has been growing by 9.69% on average over the past years. This is quite good.
EPS 1Y (TTM)12.52%
EPS 3Y10.15%
EPS 5Y10.27%
EPS Q2Q%9.31%
Revenue 1Y (TTM)8%
Revenue growth 3Y18.7%
Revenue growth 5Y9.69%
Sales Q2Q%7.38%
3.2 Future
The Earnings Per Share is expected to grow by 10.40% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.38% on average over the next years.
EPS Next Y15.15%
EPS Next 2Y14.66%
EPS Next 3Y14.55%
EPS Next 5Y10.4%
Revenue Next Year8.12%
Revenue Next 2Y8.07%
Revenue Next 3Y7.91%
Revenue Next 5Y7.38%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.61, the valuation of AXP can be described as rather expensive.
AXP's Price/Earnings ratio is a bit more expensive when compared to the industry. AXP is more expensive than 73.08% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, AXP is valued at the same level.
With a Price/Forward Earnings ratio of 18.38, AXP is valued on the expensive side.
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 65.38% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.70, AXP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 18.38 |
4.2 Price Multiples
AXP's Enterprise Value to EBITDA is on the same level as the industry average.
AXP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.97 | ||
| EV/EBITDA | 15.58 |
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.
A more expensive valuation may be justified as AXP's earnings are expected to grow with 14.55% in the coming years.
PEG (NY)1.56
PEG (5Y)2.3
EPS Next 2Y14.66%
EPS Next 3Y14.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.05%, AXP has a reasonable but not impressive dividend return.
AXP's Dividend Yield is comparable with the industry average which is at 3.66.
With a Dividend Yield of 1.05, AXP pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
5.2 History
On average, the dividend of AXP grows each year by 10.33%, 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)10.33%
Div Incr Years3
Div Non Decr Years20
5.3 Sustainability
20.27% of the earnings are spent on dividend by AXP. This is a low number and sustainable payout ratio.
The dividend of AXP is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP20.27%
EPS Next 2Y14.66%
EPS Next 3Y14.55%
322.53
+3.55 (+1.11%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners65.1%
Inst Owner Change0.26%
Ins Owners0.1%
Ins Owner Change1.9%
Market Cap225.96B
Analysts70.29
Price Target298.72 (-7.38%)
Short Float %1.52%
Short Ratio2.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
Yearly Dividend2.81
Dividend Growth(5Y)10.33%
DP20.27%
Div Incr Years3
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.57%
Min EPS beat(2)-0.95%
Max EPS beat(2)4.09%
EPS beat(4)3
Avg EPS beat(4)3.73%
Min EPS beat(4)-0.95%
Max EPS beat(4)6.52%
EPS beat(8)6
Avg EPS beat(8)4.72%
EPS beat(12)8
Avg EPS beat(12)2.19%
EPS beat(16)12
Avg EPS beat(16)8.98%
Revenue beat(2)0
Avg Revenue beat(2)-0.84%
Min Revenue beat(2)-0.88%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-2.51%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.64%
Revenue beat(12)4
Avg Revenue beat(12)0.75%
Revenue beat(16)8
Avg Revenue beat(16)1.65%
PT rev (1m)1.7%
PT rev (3m)-6.75%
EPS NQ rev (1m)0.39%
EPS NQ rev (3m)-0.81%
EPS NY rev (1m)0.22%
EPS NY rev (3m)-0.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 18.38 | ||
| P/S | 3.11 | ||
| P/FCF | 19.97 | ||
| P/OCF | 17.04 | ||
| P/B | 7.24 | ||
| P/tB | 7.24 | ||
| EV/EBITDA | 15.58 |
EPS(TTM)13.66
EY4.24%
EPS(NY)17.55
Fwd EY5.44%
FCF(TTM)16.15
FCFY5.01%
OCF(TTM)18.93
OCFY5.87%
SpS103.8
BVpS44.54
TBVpS44.54
PEG (NY)1.56
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.59% | ||
| ROE | 32.5% | ||
| ROCE | 10.41% | ||
| ROIC | 3.7% | ||
| ROICexc | 4.59% | ||
| ROICexgc | 5.09% | ||
| OM | 17.29% | ||
| PM (TTM) | 13.95% | ||
| GM | 61.84% | ||
| FCFM | 15.56% |
ROA(3y)3.36%
ROA(5y)3.17%
ROE(3y)30.79%
ROE(5y)28.26%
ROIC(3y)3.64%
ROIC(5y)3.45%
ROICexc(3y)4.36%
ROICexc(5y)4.08%
ROICexgc(3y)4.66%
ROICexgc(5y)4.41%
ROCE(3y)9.86%
ROCE(5y)9.06%
ROICexcg growth 3Y-4.54%
ROICexcg growth 5Y1.68%
ROICexc growth 3Y-3.59%
ROICexc growth 5Y1.93%
OM growth 3Y-9.36%
OM growth 5Y-1.39%
PM growth 3Y-8.95%
PM growth 5Y-1.04%
GM growth 3Y-3.2%
GM growth 5Y-1.9%
F-Score6
Asset Turnover0.26
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.38 | ||
| Debt/FCF | 17.6 | ||
| Debt/EBITDA | 13.94 | ||
| Cap/Depr | 113.15% | ||
| Cap/Sales | 2.67% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.81% | ||
| Profit Quality | 111.59% | ||
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 0.84 |
F-Score6
WACC7.64%
ROIC/WACC0.48
Cap/Depr(3y)107.59%
Cap/Depr(5y)102%
Cap/Sales(3y)2.82%
Cap/Sales(5y)3.22%
Profit Quality(3y)195.73%
Profit Quality(5y)177.62%
High Growth Momentum
Growth
EPS 1Y (TTM)12.52%
EPS 3Y10.15%
EPS 5Y10.27%
EPS Q2Q%9.31%
EPS Next Y15.15%
EPS Next 2Y14.66%
EPS Next 3Y14.55%
EPS Next 5Y10.4%
Revenue 1Y (TTM)8%
Revenue growth 3Y18.7%
Revenue growth 5Y9.69%
Sales Q2Q%7.38%
Revenue Next Year8.12%
Revenue Next 2Y8.07%
Revenue Next 3Y7.91%
Revenue Next 5Y7.38%
EBIT growth 1Y8.05%
EBIT growth 3Y7.6%
EBIT growth 5Y8.16%
EBIT Next Year45.1%
EBIT Next 3Y9.75%
EBIT Next 5YN/A
FCF growth 1Y-24.82%
FCF growth 3Y-2.5%
FCF growth 5Y0.25%
OCF growth 1Y-21.16%
OCF growth 3Y-1.37%
OCF growth 5Y0.61%