AMERICAN EXPRESS CO (AXP) Stock Fundamental Analysis
NYSE:AXP - New York Stock Exchange, Inc. - US0258161092 - Common Stock - Currency: USD
Taking everything into account, AXP scores 4 out of 10 in our fundamental rating. AXP was compared to 53 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 decent growth rate and is not valued too expensively.
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
Looking at the Return On Assets, with a value of 3.39%, AXP is in the better half of the industry, outperforming 71.70% of the companies in the same industry.
Looking at the Return On Equity, with a value of 31.00%, AXP belongs to the top of the industry, outperforming 92.45% of the companies in the same industry.
AXP's Return On Invested Capital of 3.62% is in line compared to the rest of the industry. AXP outperforms 52.83% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AXP is significantly below the industry average of 10.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.39% | ||
| ROE | 31% | ||
| ROIC | 3.62% |
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
With a decent Profit Margin value of 13.38%, AXP is doing good in the industry, outperforming 62.26% of the companies in the same industry.
AXP's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 17.21%, AXP is doing good in the industry, outperforming 66.04% of the companies in the same industry.
In the last couple of years the Operating Margin of AXP has remained more or less at the same level.
AXP has a better Gross Margin (61.37%) than 62.26% of its industry peers.
In the last couple of years the Gross Margin of AXP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.21% | ||
| PM (TTM) | 13.38% | ||
| GM | 61.37% |
OM growth 3Y-8.78%
OM growth 5Y-0.57%
PM growth 3Y-8.37%
PM growth 5Y-0.22%
GM growth 3Y-2.58%
GM growth 5Y-1.09%
2. Health
2.1 Basic Checks
AXP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AXP has been reduced compared to 1 year ago.
Compared to 5 years ago, AXP has less shares outstanding
AXP has a worse debt/assets ratio than last year.
2.2 Solvency
AXP has an Altman-Z score of 0.79. This is a bad value and indicates that AXP is not financially healthy and even has some risk of bankruptcy.
AXP has a better Altman-Z score (0.79) than 60.38% of its industry peers.
AXP has a debt to FCF ratio of 18.84. This is a negative value and a sign of low solvency as AXP would need 18.84 years to pay back of all of its debts.
AXP has a Debt to FCF ratio of 18.84. This is comparable to the rest of the industry: AXP outperforms 41.51% of its industry peers.
AXP has a Debt/Equity ratio of 6.47. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AXP (6.47) is worse than 77.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.47 | ||
| Debt/FCF | 18.84 | ||
| Altman-Z | 0.79 |
ROIC/WACC0.55
WACC6.59%
2.3 Liquidity
A Current Ratio of 0.71 indicates that AXP may have some problems paying its short term obligations.
AXP has a Current ratio of 0.71. This is comparable to the rest of the industry: AXP outperforms 43.40% of its industry peers.
AXP has a Quick Ratio of 0.71. This is a bad value and indicates that AXP is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.71, AXP perfoms like the industry average, outperforming 43.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
AXP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.85%, which is quite good.
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 small growth in Revenue. The Revenue has grown by 5.28% in the last year.
Measured over the past years, AXP shows a quite strong growth in Revenue. The Revenue has been growing by 8.79% on average per year.
EPS 1Y (TTM)11.85%
EPS 3Y10.15%
EPS 5Y10.27%
EPS Q2Q%16.91%
Revenue 1Y (TTM)5.28%
Revenue growth 3Y17.95%
Revenue growth 5Y8.79%
Sales Q2Q%9.32%
3.2 Future
AXP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.40% yearly.
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 Y15.24%
EPS Next 2Y14.6%
EPS Next 3Y14.46%
EPS Next 5Y10.4%
Revenue Next Year8.12%
Revenue Next 2Y8.07%
Revenue Next 3Y7.93%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.65 indicates a rather expensive valuation of AXP.
67.92% of the companies in the same industry are cheaper than AXP, based on the Price/Earnings ratio.
AXP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.82.
A Price/Forward Earnings ratio of 16.79 indicates a correct valuation of AXP.
AXP's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AXP is more expensive than 64.15% of the companies in the same industry.
AXP is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.65 | ||
| Fwd PE | 16.79 |
4.2 Price Multiples
AXP's Enterprise Value to EBITDA ratio is in line with the industry average.
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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.46 | ||
| EV/EBITDA | 14.3 |
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 14.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.36
PEG (5Y)2.01
EPS Next 2Y14.6%
EPS Next 3Y14.46%
5. Dividend
5.1 Amount
AXP has a Yearly Dividend Yield of 1.10%.
AXP's Dividend Yield is comparable with the industry average which is at 4.02.
Compared to an average S&P500 Dividend Yield of 2.35, AXP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
5.2 History
On average, the dividend of AXP grows each year by 10.33%, which is quite nice.
AXP has been paying a dividend for at least 10 years, so it has 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 21.24% 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.
DP21.24%
EPS Next 2Y14.6%
EPS Next 3Y14.46%
294.27
-5.04 (-1.68%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners65.1%
Inst Owner Change-0.38%
Ins Owners0.1%
Ins Owner Change1.9%
Market Cap204.78B
Analysts70.29
Price Target318.1 (8.1%)
Short Float %1.71%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
Yearly Dividend2.81
Dividend Growth(5Y)10.33%
DP21.24%
Div Incr Years3
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.98%
Min EPS beat(2)3.86%
Max EPS beat(2)4.09%
EPS beat(4)3
Avg EPS beat(4)3.06%
Min EPS beat(4)-0.95%
Max EPS beat(4)5.25%
EPS beat(8)6
Avg EPS beat(8)4.96%
EPS beat(12)8
Avg EPS beat(12)2.05%
EPS beat(16)12
Avg EPS beat(16)5.08%
Revenue beat(2)0
Avg Revenue beat(2)-0.49%
Min Revenue beat(2)-0.81%
Max Revenue beat(2)-0.18%
Revenue beat(4)0
Avg Revenue beat(4)-0.76%
Min Revenue beat(4)-1.19%
Max Revenue beat(4)-0.18%
Revenue beat(8)0
Avg Revenue beat(8)-1.2%
Revenue beat(12)3
Avg Revenue beat(12)0.83%
Revenue beat(16)7
Avg Revenue beat(16)2.19%
PT rev (1m)6.49%
PT rev (3m)7.88%
EPS NQ rev (1m)-1.27%
EPS NQ rev (3m)-2.69%
EPS NY rev (1m)0.08%
EPS NY rev (3m)-0.09%
Revenue NQ rev (1m)0.24%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.65 | ||
| Fwd PE | 16.79 | ||
| P/S | 2.73 | ||
| P/FCF | 18.46 | ||
| P/OCF | 15.64 | ||
| P/B | 6.34 | ||
| P/tB | 6.34 | ||
| EV/EBITDA | 14.3 |
EPS(TTM)14.25
EY4.84%
EPS(NY)17.53
Fwd EY5.96%
FCF(TTM)15.94
FCFY5.42%
OCF(TTM)18.81
OCFY6.39%
SpS107.6
BVpS46.42
TBVpS46.42
PEG (NY)1.36
PEG (5Y)2.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.39% | ||
| ROE | 31% | ||
| ROCE | 9.87% | ||
| ROIC | 3.62% | ||
| ROICexc | 4.55% | ||
| ROICexgc | 5.06% | ||
| OM | 17.21% | ||
| PM (TTM) | 13.38% | ||
| GM | 61.37% | ||
| FCFM | 14.82% |
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-8.78%
OM growth 5Y-0.57%
PM growth 3Y-8.37%
PM growth 5Y-0.22%
GM growth 3Y-2.58%
GM growth 5Y-1.09%
F-Score5
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.47 | ||
| Debt/FCF | 18.84 | ||
| Debt/EBITDA | 14.31 | ||
| Cap/Depr | 115.88% | ||
| Cap/Sales | 2.67% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.62% | ||
| Profit Quality | 110.76% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.79 |
F-Score5
WACC6.59%
ROIC/WACC0.55
Cap/Depr(3y)107.59%
Cap/Depr(5y)102%
Cap/Sales(3y)2.77%
Cap/Sales(5y)3.15%
Profit Quality(3y)195.73%
Profit Quality(5y)177.62%
High Growth Momentum
Growth
EPS 1Y (TTM)11.85%
EPS 3Y10.15%
EPS 5Y10.27%
EPS Q2Q%16.91%
EPS Next Y15.24%
EPS Next 2Y14.6%
EPS Next 3Y14.46%
EPS Next 5Y10.4%
Revenue 1Y (TTM)5.28%
Revenue growth 3Y17.95%
Revenue growth 5Y8.79%
Sales Q2Q%9.32%
Revenue Next Year8.12%
Revenue Next 2Y8.07%
Revenue Next 3Y7.93%
Revenue Next 5Y7.38%
EBIT growth 1Y6.08%
EBIT growth 3Y7.6%
EBIT growth 5Y8.16%
EBIT Next Year45.1%
EBIT Next 3Y9.75%
EBIT Next 5YN/A
FCF growth 1Y-25%
FCF growth 3Y-2.5%
FCF growth 5Y0.25%
OCF growth 1Y-20.57%
OCF growth 3Y-1.37%
OCF growth 5Y0.61%