AMERICAN EXPRESS CO (AXP)

US0258161092 - Common Stock

237.18  -0.07 (-0.03%)

Fundamental Rating

5

Overall AXP gets a fundamental rating of 5 out of 10. We evaluated AXP against 51 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 has a correct valuation and a medium growth rate.



6

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.
AXP had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

AXP has a better Return On Assets (3.29%) than 78.43% of its industry peers.
AXP has a Return On Equity of 30.83%. This is amongst the best in the industry. AXP outperforms 96.08% of its industry peers.
AXP has a better Return On Invested Capital (3.54%) than 60.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AXP is below the industry average of 6.49%.
Industry RankSector 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

AXP has a better Profit Margin (13.17%) than 64.71% of its industry peers.
AXP's Profit Margin has declined in the last couple of years.
AXP has a better Operating Margin (17.01%) than 64.71% of its industry peers.
AXP's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 63.13%, AXP is doing good in the industry, outperforming 64.71% of the companies in the same industry.
AXP's Gross Margin has declined in the last couple of years.
Industry RankSector 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

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AXP is destroying value.
The number of shares outstanding for AXP has been reduced compared to 1 year ago.
The number of shares outstanding for AXP has been reduced compared to 5 years ago.
The debt/assets ratio for AXP is higher compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 0.76, we must say that AXP is in the distress zone and has some risk of bankruptcy.
AXP's Altman-Z score of 0.76 is in line compared to the rest of the industry. AXP outperforms 58.82% of its industry peers.
The Debt to FCF ratio of AXP is 8.08, which is on the high side as it means it would take AXP, 8.08 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 8.08, AXP perfoms like the industry average, outperforming 54.90% of the companies in the same industry.
AXP has a Debt/Equity ratio of 6.43. This is a high value indicating a heavy dependency on external 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 RankSector Rank
Debt/Equity 6.43
Debt/FCF 8.08
Altman-Z 0.76
ROIC/WACC0.51
WACC6.9%

2.3 Liquidity

A Current Ratio of 0.76 indicates that AXP may have some problems paying its short term obligations.
The Current ratio of AXP (0.76) is comparable to the rest of the industry.
A Quick Ratio of 0.76 indicates that AXP may have some problems paying its short term obligations.
AXP has a Quick ratio (0.76) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 0.76
Quick Ratio 0.76

6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 27.66% over the past year.
The Earnings Per Share has been growing by 8.90% on average over the past years. This is quite good.
AXP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.48%.
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 Q2Q%38.75%
Revenue 1Y (TTM)16.48%
Revenue growth 3Y20.86%
Revenue growth 5Y9.45%
Sales Q2Q%3.44%

3.2 Future

The Earnings Per Share is expected to grow by 7.95% on average over the next years.
Based on estimates for the next years, AXP will show a small growth in Revenue. The Revenue will grow by 7.63% on average per year.
EPS Next Y17.02%
EPS Next 2Y15.94%
EPS Next 3Y15.07%
EPS Next 5Y7.95%
Revenue Next Year9.47%
Revenue Next 2Y8.98%
Revenue Next 3Y8.62%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

4

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 19.54, AXP is valued on the expensive side.
Based on the Price/Earnings ratio, AXP is valued a bit more expensive than the industry average as 60.78% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 28.20, AXP is valued a bit cheaper.
AXP is valuated correctly with a Price/Forward Earnings ratio of 15.74.
AXP's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AXP is more expensive than 60.78% of the companies in the same industry.
AXP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.02, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 19.54
Fwd PE 15.74

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AXP indicates a somewhat cheap valuation: AXP is cheaper than 78.43% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AXP is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 7.45
EV/EBITDA 12.67

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 15.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)2.2
EPS Next 2Y15.94%
EPS Next 3Y15.07%

5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.19%, AXP has a reasonable but not impressive dividend return.
AXP's Dividend Yield is comparable with the industry average which is at 4.17.
With a Dividend Yield of 1.19, AXP pays less dividend than the S&P500 average, which is at 2.37.
Industry RankSector Rank
Dividend Yield 1.19%

5.2 History

The dividend of AXP is nicely growing with an annual growth rate of 9.36%!
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)9.36%
Div Incr Years2
Div Non Decr Years17

5.3 Sustainability

20.60% of the earnings are spent on dividend by AXP. This is a low number and sustainable payout ratio.
The dividend of AXP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP20.6%
EPS Next 2Y15.94%
EPS Next 3Y15.07%

AMERICAN EXPRESS CO

NYSE:AXP (5/29/2024, 1:23:09 PM)

237.18

-0.07 (-0.03%)

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 Cap170.60B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.19%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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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 RankSector Rank
PE 19.54
Fwd PE 15.74
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)1.15
PEG (5Y)2.2
Profitability
Industry RankSector 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 RankSector 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)
High Growth Momentum
Growth
EPS 1Y (TTM)27.66%
EPS 3Y43.93%
EPS 5Y
EPS Q2Q%
EPS Next Y17.02%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)16.48%
Revenue growth 3Y20.86%
Revenue growth 5Y
Sales 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