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Fundamental analysis: American Express Company (AXP)

Awarener score: 6.4

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 (Average), the business stability (Average) and growth (Modest), and the company's inclination to return cash to the stockholders (Excellent).

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: 5.5

  • Business growth has been almost stagnant. It's been great when measured against peer companies.
  • American Express Company business trend stability is run-of-the-mill. The higher the stability, the lower the risk. It looks slightly better than rivals.

Margins score: 6.7

  • AXP profit margins -on goods and services sold- are usually destitute. They stand bottom tier against rival companies.
  • Business profit on sales tends to be hardly sufficient. It's weak when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain rather normal in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be excellent in relation to total revenues. They're still slightly better than similar companies.
  • Profits -before income taxes- are usually excellent considering total sales, and remain similar to rivals.
  • Total net profit tends to be very good when confronted to sales. Company stands encouraging in relation to comparable firms.

Growth score: 4.8

  • American Express Company has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against 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, profits -before income taxes- grew at a very low speed. It was mediocre against rivals.
  • In the previous years, growth trend on total net profit has been good, and encouraging in relation to peer companies.
  • Earnings per share have grown at a good rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 4.0

  • AXP had to pay substantial income taxes in relation to profits made in the past years. It's been mediocre against 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 almost average when measured against peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain in good shape compared 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 almost average when measured against comparable enterprises.

Usage of Funds score: 3.9

  • AXP on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands almost average when measured against rival firms.
  • The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is encouraging in relation to industry peers.
  • In the past twelve months it paid somewhat low dividends, considering the current stock price. It came somewhat worse than competitors.
  • Dividend payments have been more or less stable in recent years. The company has behaved in a weak position compared to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks slightly better than comparable companies.
  • The company usually significantly 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 excellent in relation to rivals.
  • The company generates very few genuine funds. Investor rewards must be paid burning existing cash or by borrowing money, which isn't sustainable in the long run. Unless business prospects improve greatly, stockholder compensation could be at risk. It still looks almost average when measured against competitors.

Balance Sheet score: 5.5

  • 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 lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
  • Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains somewhat better than rival firms.
  • Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks weak when measured against rivals.
  • For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's close to average when compared to peer firms.
  • For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is somewhat better than similar enterprises.
  • Usually, sales are mostly on cash. It still ranks great when measured against 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 reasonable when measured against loans taken. Cutting back reinvesting in the business, it could take more than five years to repay the obligations with current profitability. It ranks encouraging in relation to comparable enterprises.
  • Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks close to average when compared 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: 5.5

  • 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 consumed funds. Either it reinvested significantly in the business or genuine fund generation might be struggling, which stands somewhat better than similar companies.
  • The company usually consumes more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving business growth, genuine profitability may be brought into question. It's still more than average in relation to industry firms.
  • In the past twelve months, the company has rewarded investors, considering both dividends and share on the pie of earnings. It came up a slight improvement compared to peer ventures.
  • The company has barely more debt than 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 weak 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 worse than most peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be similar 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 rather normal in relation to peer companies.

Total score: 5.5


AXP logos

Company at a glance: American Express Company (AXP)

Sector, industry: Financial Services, Credit Services

Market Cap: 105.16 billions

Revenues TTM: 48.33 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.

Awarener score: 6.4

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 (Average), the business stability (Average) and growth (Modest), and the company's inclination to return cash to the stockholders (Excellent).