AMERICAN EXPRESS CO (AXP) Stock Fundamental Analysis
NYSE:AXP - New York Stock Exchange, Inc. - US0258161092 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to AXP. AXP was compared to 52 industry peers in the Consumer Finance industry. There are concerns on the financial health of AXP while its profitability can be described as average. While showing a medium growth rate, AXP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year AXP was profitable.
AXP had a positive operating cash flow in the past year.
Each year in the past 5 years AXP has been profitable.
Each year in the past 5 years AXP had a positive operating cash flow.
1.2 Ratios
AXP has a better Return On Assets (3.59%) than 73.08% of its industry peers.
AXP has a Return On Equity of 32.50%. This is amongst the best in the industry. AXP outperforms 94.23% of its industry peers.
The Return On Invested Capital of AXP (3.70%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for AXP is significantly below the industry average of 10.33%.
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
AXP has a better Profit Margin (13.95%) than 63.46% of its industry peers.
AXP's Profit Margin has been stable in the last couple of years.
AXP's Operating Margin of 17.29% is fine compared to the rest of the industry. AXP outperforms 65.38% of its industry peers.
AXP's Operating Margin has been stable in the last couple of years.
AXP's Gross Margin of 61.84% is fine compared to the rest of the industry. AXP outperforms 61.54% of its industry peers.
AXP's Gross Margin has declined in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AXP is destroying value.
Compared to 1 year ago, AXP has less shares outstanding
The number of shares outstanding for AXP has been reduced compared to 5 years ago.
AXP has a worse debt/assets ratio than last year.
2.2 Solvency
AXP has an Altman-Z score of 0.80. This is a bad value and indicates that AXP is not financially healthy and even has some risk of bankruptcy.
AXP's Altman-Z score of 0.80 is in line compared to the rest of the industry. AXP outperforms 55.77% of 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 comparable to the rest of the industry.
AXP has a Debt/Equity ratio of 6.38. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AXP (6.38) is worse than 78.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.38 | ||
| Debt/FCF | 17.6 | ||
| Altman-Z | 0.8 |
ROIC/WACC0.49
WACC7.58%
2.3 Liquidity
A Current Ratio of 0.68 indicates that AXP may have some problems paying its short term obligations.
With a Current ratio value of 0.68, AXP perfoms like the industry average, outperforming 42.31% of the companies in the same industry.
A Quick Ratio of 0.68 indicates that AXP may have some problems paying its short term obligations.
AXP's Quick ratio of 0.68 is in line compared to the rest of the industry. AXP outperforms 42.31% of its industry peers.
| 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.
The Earnings Per Share has been growing by 10.27% on average over the past years. This is quite good.
The Revenue has grown by 8.00% in the past year. This is quite good.
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
Based on estimates for the next years, AXP will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.40% on average per year.
Based on estimates for the next years, AXP will show a small growth in Revenue. The Revenue will grow by 7.38% on average per year.
EPS Next Y14.89%
EPS Next 2Y14.58%
EPS Next 3Y14.62%
EPS Next 5Y10.4%
Revenue Next Year8.12%
Revenue Next 2Y8.07%
Revenue Next 3Y7.9%
Revenue Next 5Y7.38%
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.
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
The Price/Earnings ratio is 21.90, which indicates a rather expensive current valuation of AXP.
Compared to the rest of the industry, the Price/Earnings ratio of AXP indicates a slightly more expensive valuation: AXP is more expensive than 67.31% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of AXP to the average of the S&P500 Index (26.55), we can say AXP is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 17.07, the valuation of AXP can be described as rather expensive.
65.38% of the companies in the same industry are cheaper than AXP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.40. AXP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.9 | ||
| Fwd PE | 17.07 |
4.2 Price Multiples
AXP's Enterprise Value to EBITDA ratio is in line with the industry average.
AXP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.52 | ||
| EV/EBITDA | 14.63 |
4.3 Compensation for Growth
AXP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AXP has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as AXP's earnings are expected to grow with 14.62% in the coming years.
PEG (NY)1.47
PEG (5Y)2.13
EPS Next 2Y14.58%
EPS Next 3Y14.62%
5. Dividend
5.1 Amount
AXP has a Yearly Dividend Yield of 1.11%.
Compared to an average industry Dividend Yield of 3.69, AXP has a dividend in line with its industry peers.
With a Dividend Yield of 1.11, AXP pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.11% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.33%
Div Incr Years3
Div Non Decr Years20
5.3 Sustainability
AXP pays out 20.27% of its income as dividend. This is a 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 2Y14.58%
EPS Next 3Y14.62%
299.1
-0.42 (-0.14%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners65.26%
Inst Owner Change0.26%
Ins Owners0.12%
Ins Owner Change1.9%
Market Cap209.55B
Analysts70.29
Price Target298.72 (-0.13%)
Short Float %1.85%
Short Ratio2.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.11% |
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)1.31%
PT rev (3m)-7.77%
EPS NQ rev (1m)0.19%
EPS NQ rev (3m)-0.83%
EPS NY rev (1m)-0.39%
EPS NY rev (3m)-0.75%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)-0.32%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.9 | ||
| Fwd PE | 17.07 | ||
| P/S | 2.88 | ||
| P/FCF | 18.52 | ||
| P/OCF | 15.8 | ||
| P/B | 6.72 | ||
| P/tB | 6.72 | ||
| EV/EBITDA | 14.63 |
EPS(TTM)13.66
EY4.57%
EPS(NY)17.53
Fwd EY5.86%
FCF(TTM)16.15
FCFY5.4%
OCF(TTM)18.93
OCFY6.33%
SpS103.8
BVpS44.54
TBVpS44.54
PEG (NY)1.47
PEG (5Y)2.13
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 | 0.8 |
F-Score6
WACC7.58%
ROIC/WACC0.49
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 Y14.89%
EPS Next 2Y14.58%
EPS Next 3Y14.62%
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 3Y7.9%
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%