AXP  American Express Company

Exchange

NYSE

Sector

Finance

Industry

Finance: Consumer Services

Market Cap.

70.48B

Vuru Grade

70.67/100

Current Price

$78.20
+0.36 (+0.46%)

Growth Price

$61.96
Overvalued by 20.77%

Stability Price

$114.23
Undervalued by 46.07%

Company Metrics

  • P/E 13.84
  • P/S 2.35
  • P/B 3.43
  • EPS 5.65
  • Cash ROIC 3.84%
  • Cash Ratio -
  • Dividend 1.28 / 1.65%
  • Avg. Vol. 4.26M
  • Shares 901.28M
  • Market Cap. 70.48B

Company Description

American Express Company provides charge and credit payment card products, and travel-related services worldwide. It offers a range of products and services, including charge and credit card products; expense management products and services; consumer and business travel services; stored value products, such as Travelers Cheques and prepaid products; network services; merchant acquisition, and mer... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

American Express Plans Live Audio Webcasts of the First Quarter 2017 Earnings ...
Business Wire (press release) - Mar 22, 2017
NEW YORK--(BUSINESS WIRE)--American Express Company (NYSE:AXP) plans to host a live audio webcast of its earnings conference call at 5:00 p.m.
American Express Company (AXP) Closes 0.22% Up on the Day for March 23 - Equities.com
United Capital Financial Advisers LLC Decreases Stake in American Express ... - The Cerbat Gem
American Express Shareholders: This Is Your Meal Ticket
Seeking Alpha - Mar 5, 2017
I've been critical of American Express (NYSE:AXP) in the past couple of years because I've thought the valuation to be constantly stretched.
Buffett Stocks In Focus: American Express
Seeking Alpha - Mar 2, 2017
Buffett is required to disclose his holdings through 13F filings, which are filed with the Securities and Exchange Commission and detail the company's portfolio of common stock investments. American Express (NYSE:AXP) is a core holding in Berkshire ...
Analyst Activity – Tigress Financial Initiates Coverage On American Express ...
Market Exclusive - 23 hours ago
On 11/22/2016 American Express Company announced a quarterly dividend of $0.32 1.76% with an ex dividend date of 1/4/2017 which will be payable on 2/10/2017.
American Express Company (AXP): What's the Story? - StockNewsJournal
American Express Company (AXP) Closes 0.46% Up on the Day for March 24 - Equities.com
Buffett Stocks In Focus: American Express Company (AXP)
ValueWalk - Mar 10, 2017
These loans were disproportionately large given the economics of the underlying business. Eventually, the company defaulted, and AXP suffered losses as one of its creditors.
EOD Risers: American Express Company, Boeing Co, EI Du Pont De Nemours And Co ...
DirectorsTalk Interviews - Mar 24, 2017
The share price for American Express Company found using EPIC: (NYSE:AXP) a services company, rose 0.22% or 0.17 points by the close of business yesterday.
Guy Adami And Tim Seymour Share Their Thoughts On American Express And Goldman ...
Benzinga - Mar 24, 2017
Guy Adami shared with the viewers of CNBC's Fast Money his reasons to buy American Express Company (NYSE: AXP). He believes the stock is going to return to the valuation of 15.5 forward price to earnings multiple.
American Express, Johnson & Johnson, Square, Vale: Fast Money Picks For March 24
Benzinga - Mar 24, 2017
On CNBC's Fast Money Final Trade, Pete Najarian said he noticed unusually high call options volume in Vale SA (ADR) (NYSE: VALE).
Risk Malaise Alert in Option Market: American Express Company Implied Price ...
CML News - Mar 19, 2017
Before we dive into any analysis we simply note that American Express Company (NYSE:AXP) risk is actually priced pretty low by the option market as of right now.
EOD Risers: 3M Co, American Express Company, Apple Inc.
DirectorsTalk Interviews - Mar 23, 2017
Stock in American Express Company with EPIC code: (NYSE:AXP) a services company, climbed 0.18% or 0.14 points at the end of yesterday's session.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AXP to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AXP's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$78.20 Current Price

$61.96 Growth Price (DCF)

Overvalued by 20.77%


Growth Rate Assumed by Market: 3.20%


Future Free Cash Flow Growth Rate: -5.8%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$114.23 Stability Price (EPV)

Undervalued by 46.07%


Discount Rate: 15.0%

$80.17 Book Price

Fairly valued


Poor Cash Return on Invested Capital over the past 5 years

AXP has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

AXP has only created $3.84 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 4.39B 4.75B 4.71B 9.63B 6.85B
divided by
Invested Capital 153.14B 153.38B 159.10B 161.18B 158.89B
Cash ROIC 2.87% 3.10% 2.96% 5.98% 4.31%

Excellent Return on Equity over the past 5 years

Over the past 5 years, AXP has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

AXP has generated $26.21 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 4.48B 5.36B 5.89B 5.16B 5.41B
divided by
Stockholders' Equity 18.89B 19.50B 20.67B 20.67B 20.50B
Return on Equity 23.73% 27.49% 28.47% 24.97% 26.38%

Excellent Business Performance over the past 10 years

AXP has been able to maintain profitability in good times and bad. This could mean AXP has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

AXP has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 8.48B 8.67B 5.61B 8.40B 10.48B 4.39B 4.75B 4.71B 9.63B 6.85B

Weak Balance Sheet

AXP's financial position is not ideal. The key is to check whether AXP is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 149.83B 126.07B 124.09B 147.04B 153.34B 153.14B 153.38B 159.10B 161.18B 158.89B
Current Liabilities - - - - - - - - - -
Total Liabilities 138.80B 114.23B 109.68B 130.81B 134.54B 134.25B 133.88B 138.43B 140.51B 138.39B
Stockholder' Equity 11.03B 11.84B 14.41B 16.23B 18.79B 18.89B 19.50B 20.67B 20.67B 20.50B
Current Ratio - - - - - - - - - -
TL-to-TA 0.93 0.91 0.88 0.89 0.88 0.88 0.87 0.87 0.87 0.87

Consistent Reinvestment of Profits over the past 10 years

AXP has consistently retained profits. This may put AXP in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, AXP can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 1.08B 2.72B 3.74B 4.97B 7.22B 7.53B 8.51B 9.51B 9.67B 10.37B
Retained Earnings Growth - 152.93% 37.44% 33.05% 45.23% 4.21% 13.05% 11.83% 1.60% 7.30%

Potential Competitive Advantage over the past 10 years

AXP potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$14.39 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 4.01B 2.70B 2.13B 4.06B 4.94B 4.48B 5.36B 5.89B 5.16B 5.41B
divided by
Revenue 27.73B 28.37B 24.52B 27.82B 29.96B 31.58B 32.97B 34.29B 32.82B 32.12B
Net Profit Margin 14.47% 9.52% 8.69% 14.58% 16.47% 14.19% 16.25% 17.16% 15.73% 16.84%

Weak Pricing Power over the past 10 years

AXP is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that AXP has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 27.73B 28.37B 24.52B 27.82B 29.96B 31.58B 32.97B 34.29B 32.82B 32.12B
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

AXP has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that AXP may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

24.58% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - 772.00M 887.00M - 1.05B 1.01B 1.20B 1.34B 1.38B
divided by
Net Income 4.01B 2.70B 2.13B 4.06B 4.94B 4.48B 5.36B 5.89B 5.16B 5.41B
Capital Expenditure Ratio - - 36.24% 21.86% - 23.49% 18.77% 20.31% 25.97% 25.43%

Very Strong Dividend History over the past 10 years

AXP has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests AXP is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 712.00M 836.00M 924.00M 867.00M 861.00M 902.00M 939.00M 1.04B 1.17B 1.21B
divided by
Shares Outstanding 1.20B 1.16B 1.17B 1.20B 1.18B 1.14B 1.09B 1.05B 1.00B 935.00M
Dividend Paid Per Share 0.60 0.72 0.79 0.73 0.73 0.79 0.86 0.99 1.17 1.29
Price at Year End 46.51 16.75 39.30 41.69 46.99 56.67 89.59 94.27 70.16 74.08
Dividend Yield 1.28% 4.31% 2.01% 1.74% 1.55% 1.39% 0.96% 1.05% 1.67% 1.74%

Strong History of Stock Buybacks over the past 10 years

AXP has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 1.20B 1.16B 1.17B 1.20B 1.18B 1.14B 1.09B 1.05B 1.00B 935.00M
Stock Bought Back - 3.37% -1.20% -2.01% 0.93% 3.77% 4.78% 3.62% 4.79% 7.27%
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