Fundamental analysis: American Express Company (AXP)

Awarener score: 7.8

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Modest) and growth (Modest), and the company's inclination to return cash to the stockholders (Very good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.0

Business growth has been almost stagnant. It's been similar to peer companies.
American Express Company business trend isn't so stable. The higher the stability, the lower the risk. It looks somewhat worse than rivals.

Margins score: 7.3

AXP profit margins -on goods and services sold- are usually meagre. They stand somewhat worse than rival companies.
Business profit on sales tends to be sufficient. It's below average when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain close to average when compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be excellent in relation to total revenues. They're still slightly worse than similar companies.
Profits -before income taxes- are usually excellent considering total sales, and remain almost average when measured against rivals.
Total net profit tends to be very good when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 4.9

American Express Company profit -on goods and services sold- has been growing at an extremely fast pace. It's been in good shape compared to competitors.
In recent years, earnings -on operations- have been growing at a very good step, which has been somewhat better than comparable firms.
Profits growth -available to repay debt and purchase properties- have been almost stagnant, which compares weak when measured against peer enterprises.
Growth on earnings -before income taxes and interests on loans taken- have been almost stagnant. It turns to be lacking compared to similar stocks.
In past years, growth on profits -before income taxes- was almost stagnant. It was mediocre against rivals.
In the previous years, growth on total net profit has been almost null, and weak when measured against peer companies.
Earnings per share have grown at a very low rhythm in past years. It's been in a weak position compared to industry peers.

Miscellaneous score: 6.0

AXP had to pay sparse income taxes in relation to profits made in the past years. It's been slightly better than peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.2

American Express Company usually gets good returns on the resources it controls. It proves below average when measured against peer firms.
The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
Profitability -in relation to owned resources- is usually paramount. It ranks great when measured against competitors.
In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 7.5

AXP usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands below average when measured against rival firms.
The company is usually somewhat investing in new property, plant, and equipment, to improve its operating capabilities, which is more than average in relation to industry peers.
In the past twelve months it paid somewhat low dividends, considering the current stock price. It came mediocre against competitors.
Dividend payments have been more or less stable in recent years. The company has behaved in a weak position compared to similar firms.
Dividend payments usually represent a slight portion of genuine funds generation and are most likely safe. Sustainability looks slightly worse than comparable companies.
The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in good shape compared to rivals.
The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks almost average when measured against competitors.

Balance Sheet score: 7.6

American Express Company has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
The company has plenty short-term resources to face short-term obligations. There're no liquidity concerns. It turns to be excellent in relation to similar firms.
Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains somewhat better than rival firms.
Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks below average when measured against rivals.
For every dollar of short-term obligations, the company has plenty of dollars in cash and short-term receivables. It's excellent in relation to peer firms.
For every dollar of short-term obligations, the company has plenty of dollars in cash and equivalents, which is top-notch against similar enterprises.
Usually, sales are mostly on cash. It still ranks more than average in relation to peers.
Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks encouraging in relation to comparable enterprises.
Fixed assets turnover remains undisclosed. It looks we cannot relate it to similar firms.
Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 7.0

American Express Company looks reasonable in relation to profits and financial position. It happens to be encouraging in relation to competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands somewhat better than similar companies.
The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still encouraging in relation to industry firms.
In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks somewhat better than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks below average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a three or four to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still a slight improvement compared to peer companies.

Total score: 6.7

Company at a glance: American Express Company (AXP)

Sector, industry: Financial Services, Credit Services

Market Cap: 116.87 billions

Revenues TTM: 55.35 billions

American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide. The company operates through three segments: Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services. Its products and services include payment and financing products; network services; accounts payable expense management products and services; and travel and lifestyle services. The company's products and services also comprise 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. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, third-party vendors 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.