AXP  American Express Company

Exchange

NYSE

Sector

Finance

Industry

Finance: Consumer Services

Market Cap.

72.06B

Vuru Grade

67.32/100

Current Price

$79.71
+0.20 (+0.25%)

Growth Price

$77.84
Fairly valued

Stability Price

$111.03
Undervalued by 39.29%

Company Metrics

  • P/E 14.11
  • P/S 2.39
  • P/B 3.42
  • EPS 5.65
  • Cash ROIC 4.35%
  • Cash Ratio -
  • Dividend 1.28 / 1.61%
  • Avg. Vol. 4.25M
  • Shares 904.03M
  • Market Cap. 72.06B

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 Company (AXP) Closes 0.25% Up on the Day for February 17
Equities.com - Feb 17, 2017
After opening the trading day at $79.22, shares of American Express Company traded between a range of $78.90 and $79.78. American Express Company currently has a total float of 904 million shares and on average sees 4.53 million shares exchange ...
First Interstate Bank Cuts Position in American Express Company (AXP) - The Cerbat Gem
The Bank of America Corporation Raises American Express Company (AXP) Price ... - DailyQuint
American Express: Double-Digit Returns Despite Uncertainty
Seeking Alpha - Jan 29, 2017
While this is good absolute return over a three-month period, note that the stock hasn't kept up with either the XLF financials benchmark or some of the card companies AXP is often compared to such as Discover Financial Services (NYSE:DFS) and ...
American Express: Signs of Life Amidst the Costco Rubble
Motley Fool - Jan 25, 2017
Last week American Express reported its quarterly earnings, giving investors another chance to evaluate how the company was faring since losing its huge co-brand relationships with Costco Wholesale Corporation and JetBlue Airways Corporation last year.
American Express Is Worth $102 A Share
Seeking Alpha - Jan 27, 2017
American Express (NYSE:AXP) missed 4Q earnings estimates by 8%. Despite the miss, the ... In our view, loan growth remains a key part of the company's near-term strategy and should bode well for higher net interest income in 2017. Source: Company data.
American Express Company (AXP) Closes 0.55% Up on the Day for February 13
Equities.com - Feb 13, 2017
After opening the trading day at $78.82, shares of American Express Company traded between a range of $78.48 and $79.18. American Express Company currently has a total float of 904 million shares and on average sees 4.51 million shares exchange ...
American Express Company (AXP) Closes 0.49% Up on the Day for February 09
Equities.com - Feb 9, 2017
Shares of American Express Company (AXP) ended the trading day Thursday at $78.18, representing a move of 0.49%, or $0.38 per share, on volume of 3.02 million shares.
Smithfield Trust Co Cuts Position in American Express Company (AXP) by $1327069 - Highland Mirror
Is It Time to go for American Express Company (AXP), BB&T Corporation (BBT)? - StockNewsJournal
Analyst Activity – DA Davidson Raises Its Price Target On American Express ...
Market Exclusive - Feb 14, 2017
Today, DA Davidson raised its price target on American Express Company (NYSE:AXP) to per share. There are 6 sell ratings, 13 hold ratings, 8 buy ratings on the stock.
American Express' 3 Step Plan to Get Back on Track
Motley Fool - Jan 27, 2017
American Express Company (NYSE:AXP) reported earnings last week in what was largely a mixed bag. Revenue came in at $8.02 billion, an approximate 4% decline from last year's fourth quarter.
Dissecting American Express Post-Earnings Valuation (AXP, COST) - Investopedia
American Express Company (AXP) Closes 0.1% Down on the Day for January 27 - Equities.com
American Express Company Elects John Brennan to Board of Directors
Yahoo Finance - Jan 24, 2017
Mr. Brennan is a director of General Electric Company, LPL Financial and the Guardian Life Insurance Company of America. He is the chairman of the Financial Industry Regulatory Authority (FINRA); chairman of Vanguard Charitable; and chairman of the ...
Form 8-K AMERICAN EXPRESS CO For: Jan 24 - StreetInsider.com
American Express Company (AXP) Closes 2% Up on the Day for February 03
Equities.com - Feb 3, 2017
After opening the trading day at $77.14, shares of American Express Company traded between a range of $76.91 and $78.42. American Express Company currently has a total float of 904 million shares and on average sees 4.44 million shares exchange ...
Family Capital Trust Co Boosts Position by $4377062 in American Express ... - Highland Mirror
American Express Company (AXP) Shares Sold by Boston Private Wealth LLC - The Cerbat Gem
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.

$79.71 Current Price

$77.84 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: -4.88%


Future Free Cash Flow Growth Rate: -5.8%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$111.03 Stability Price (EPV)

Undervalued by 39.29%


Discount Rate: 15.0%

$80.99 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 $4.35 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 10.48B 4.39B 4.75B 4.71B 9.63B
divided by
Invested Capital 153.34B 153.14B 153.38B 159.10B 161.18B
Cash ROIC 6.83% 2.87% 3.10% 2.96% 5.98%

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 $26.18 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 4.94B 4.48B 5.36B 5.89B 5.16B
divided by
Stockholders' Equity 18.79B 18.89B 19.50B 20.67B 20.67B
Return on Equity 26.26% 23.73% 27.49% 28.47% 24.97%

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
2006200720082009201020112012201320142015
Free Cash Flow 9.01B 8.48B 8.67B 5.61B 8.40B 10.48B 4.39B 4.75B 4.71B 9.63B

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
2006200720082009201020112012201320142015
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 127.85B 149.83B 126.07B 124.09B 147.04B 153.34B 153.14B 153.38B 159.10B 161.18B
Current Liabilities - - - - - - - - - -
Total Liabilities 117.34B 138.80B 114.23B 109.68B 130.81B 134.54B 134.25B 133.88B 138.43B 140.51B
Stockholder' Equity 10.51B 11.03B 11.84B 14.41B 16.23B 18.79B 18.89B 19.50B 20.67B 20.67B
Current Ratio - - - - - - - - - -
TL-to-TA 0.92 0.93 0.91 0.88 0.89 0.88 0.88 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
2006200720082009201020112012201320142015
Retained Earnings 1.15B 1.08B 2.72B 3.74B 4.97B 7.22B 7.53B 8.51B 9.51B 9.67B
Retained Earnings Growth - -6.76% 152.93% 37.44% 33.05% 45.23% 4.21% 13.05% 11.83% 1.60%

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.

$14.14 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 3.71B 4.01B 2.70B 2.13B 4.06B 4.94B 4.48B 5.36B 5.89B 5.16B
divided by
Revenue 25.90B 27.73B 28.37B 24.52B 27.82B 29.96B 31.58B 32.97B 34.29B 32.82B
Net Profit Margin 14.31% 14.47% 9.52% 8.69% 14.58% 16.47% 14.19% 16.25% 17.16% 15.73%

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
2006200720082009201020112012201320142015
Gross Profit - - - - - - - - - -
divided by
Revenue 25.90B 27.73B 28.37B 24.52B 27.82B 29.96B 31.58B 32.97B 34.29B 32.82B
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.

24.44% 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
2006200720082009201020112012201320142015
Capital Expenditure - - - 772.00M 887.00M - 1.05B 1.01B 1.20B 1.34B
divided by
Net Income 3.71B 4.01B 2.70B 2.13B 4.06B 4.94B 4.48B 5.36B 5.89B 5.16B
Capital Expenditure Ratio - - - 36.24% 21.86% - 23.49% 18.77% 20.31% 25.97%

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
2006200720082009201020112012201320142015
Dividend Paid 661.00M 712.00M 836.00M 924.00M 867.00M 861.00M 902.00M 939.00M 1.04B 1.17B
divided by
Shares Outstanding 1.24B 1.20B 1.16B 1.17B 1.20B 1.18B 1.14B 1.09B 1.05B 1.00B
Dividend Paid Per Share 0.53 0.60 0.72 0.79 0.73 0.73 0.79 0.86 0.99 1.17
Price at Year End 54.95 46.51 16.75 39.30 41.69 46.99 56.67 89.59 94.27 70.16
Dividend Yield 0.97% 1.28% 4.31% 2.01% 1.74% 1.55% 1.39% 0.96% 1.05% 1.67%

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
2006200720082009201020112012201320142015
Shares Outstanding 1.24B 1.20B 1.16B 1.17B 1.20B 1.18B 1.14B 1.09B 1.05B 1.00B
Stock Bought Back - 3.51% 3.37% -1.20% -2.01% 0.93% 3.77% 4.78% 3.62% 4.79%
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