Analyzing American Express (AXP) & Its Rivals

American Express (NYSE:AXP) is one of 120 public companies in the “Consumer Finance” industry, but how does it contrast to its peers? We will compare American Express to similar companies based on the strength of its dividends, analyst recommendations, institutional ownership, earnings, valuation, profitability and risk.

Dividends

American Express pays an annual dividend of $3.80 per share and has a dividend yield of 1.2%. American Express pays out 21.4% of its earnings in the form of a dividend. As a group, “Consumer Finance” companies pay a dividend yield of 6.1% and pay out 34.2% of their earnings in the form of a dividend. American Express has increased its dividend for 4 consecutive years.

Risk & Volatility

American Express has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, American Express’ peers have a beta of 1.26, meaning that their average stock price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for American Express and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Express	1	13	17	1	2.56
American Express Competitors	890	3351	5288	274	2.50

American Express presently has a consensus price target of $365.22, indicating a potential upside of 13.77%. As a group, “Consumer Finance” companies have a potential upside of 21.65%. Given American Express’ peers higher possible upside, analysts clearly believe American Express has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares American Express and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
American Express	$72.23 billion	$10.83 billion	18.08
American Express Competitors	$3.61 billion	$385.17 million	5.82

American Express has higher revenue and earnings than its peers. American Express is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

84.3% of American Express shares are owned by institutional investors. Comparatively, 45.9% of shares of all “Consumer Finance” companies are owned by institutional investors. 0.1% of American Express shares are owned by company insiders. Comparatively, 22.1% of shares of all “Consumer Finance” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares American Express and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Express	15.80%	34.19%	3.83%
American Express Competitors	9.92%	-15.65%	2.14%

Summary

American Express beats its peers on 10 of the 15 factors compared.

About American Express

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company’s products and services include credit card, charge card, banking, and other payment and financing products; network services; expense management products and services; and travel and lifestyle services. It also provides merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. In addition, the company operates lounges at airports under Centurion Lounge brand name. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.