Dividend Hike of the Week: American Express (AXP)
Dividend Increase: +17.00%. 3 consecutive years and 15+ years of sustainable payouts without cut with regular increases over years.
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Intro
💡 Invest in companies you believe in - W. Buffett
This week, American Express (AXP) has captured attention with its impressive financial performance and consistent growth. A global leader in payments and financial services, the company reported 8% year-over-year revenue growth while maintaining a strong operating margin of 20.94%.
With a financial score of 96 out of 100 and a 12-month yield of 57.53%, AXP stands out as one of the most stable and profitable companies in its sector. Adding to its appeal, the company has increased its dividend by an impressive 69% over the past five years, reinforcing its commitment to delivering value to shareholders.
History of the Company
American Express (AXP) was founded in 1850 in Buffalo, New York, initially as an express mail business. Over the years, it evolved into a financial services leader, marking a pivotal moment in 1891 with the introduction of its first charge card. This transformation laid the groundwork for the company's continued innovation in financial products and services.
Going public in 1965, American Express expanded rapidly through the 1980s and 1990s, becoming synonymous with premium financial offerings. Today, it stands as a global powerhouse in the payments industry, offering a range of credit and charge card solutions, continuing its legacy of financial excellence and customer satisfaction.
Key Information
American Express is one of the largest global payment systems, operating in three core areas:
Card issuing (including partnerships with other institutions),
Merchant acquiring (payment acceptance),
Payment network services.
The company offers products for a wide range of customers, from individuals to small and medium-sized businesses, as well as large corporations around the world. American Express cards are accepted at millions of merchant locations globally, a testament to the brand's trust and versatility.
Key Institutional Investors in American Express (AXP)
As of September 30, 2024, the largest institutional investors in American Express include some of the most prominent global investment firms:
The Vanguard Group, Inc. – Holding 64.5 million shares, Vanguard owns 9.1% of American Express, making it the largest institutional shareholder. Vanguard is known for its long-term investment approach and is one of the biggest asset management companies in the world.
BlackRock, Inc. – With 62.0 million shares, BlackRock holds 8.7% of the company’s shares. BlackRock is a global investment management firm, managing assets across a wide range of investment classes.
State Street Corporation – Owning 40.0 million shares, State Street holds 5.6% of American Express. State Street is one of the world's leading asset managers, providing investment management and servicing to institutional clients globally.
What Makes American Express Stand Out?
American Express (NYSE: AXP)
Financial Score: 96 / 99 ⭐️⭐️⭐️⭐️⭐️
Industry: Credit Services
Annualized 3-Year Dividend Growth - 16.22%
👉 Learn more about Financial Score
American Express (AXP) is a global leader in payment services, known for offering a variety of credit and charge cards, financial products, and services to consumers, small businesses, and large corporations worldwide.
Founded in 1850 and headquartered in New York, Amex has developed a strong brand reputation for providing premium customer experiences and innovative financial solutions.
The company operates across several segments, including U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services.
Premium financial products: American Express is known for offering premium credit cards with exclusive benefits like travel perks, concierge services, and high rewards rates.
Strong global presence: Operating in over 130 countries, Amex serves millions of customers globally through its credit and payment solutions.
Innovative payments platform: Amex continues to lead in digital payments, enhancing security and customer convenience with features like contactless payments and fraud prevention tools.
American Express - Quick MaxDividends Team Overview
🟢 According to the latest reports, the company is currently showing financial profit. 🟢 Business sales are growing steadily, which indicates the stable development of the company 🟢 The growth in operating profit over recent years confirms the strategic success of the company and its ability to increase its presence in the market. 🟢 The dynamics of earnings per share are positive, the company shows good pace and stability in terms of profitability 🟢 The company demonstrates a high degree of sustainability and provides stable income.Financial Statement
If you want to stay on top of your portfolio's health, don't forget to check in on the financials of the companies you've invested in. The better shape they’re in, the better your results will be. Keep an eye on their quarterly and annual reports to see how they're performing.
Here is a quick dive into American Express financials over last years
The strongest and most stable companies tend to have a Financial Score of 80+, with the very best ones hitting 90+. If you see that score start to dip below 80, that’s your cue to consider jumping ship before things get worse.
👉 Learn More about Financial Score
Our Paid Members get access to a curated watchlist of 19,000 companies worldwide, all scored by our team on a regular basis.
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Companies like American Express are on that list, too.
Recent American Express Financial Performance (2024)
As of September 30, 2024, American Express reported total revenues net of interest expense of $48.77 billion, an increase of 9% compared to $44.72 billion for the same period in 2023. The company's net income for the nine months ended September 30, 2024, was $7.96 billion, up from $6.44 billion in 2023.
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Why Now Could Be a Buying Opportunity?
While American Express (AXP) has seen its share price dip recently, several factors suggest now could be a good time to consider adding it to your portfolio:
Strong financial performance: Despite market fluctuations, AXP continues to demonstrate strong financial performance. Recent reports show steady revenue growth, a healthy operating margin, and consistent profitability. This stability makes it a potentially attractive investment for long-term growth.
Dividend growth: AXP has a history of increasing its dividend, with a 69% increase over the past five years. This commitment to shareholder returns makes it appealing for income-focused investors.
Undervalued potential: Analysts suggest AXP is currently fairly valued, meaning it's not significantly over or underpriced compared to its peers. This presents a potential buying opportunity for investors looking for a solid company at a reasonable price.
Market correction: The recent market downturn has impacted many stocks, including AXP. This broader market correction could present a buying opportunity for investors who believe in AXP's long-term prospects.
Long-term growth potential: AXP is a well-established leader in the financial services industry with a strong brand reputation and a global presence. This positions it well for continued growth in the long term.
Competitors
1. Capital One Financial Corporation (NYSE: COF)
Financial Score: 84 / 99
Industry: Credit Services
Capital One Financial Corporation is one of the largest financial companies based in McLean, Virginia. Founded in 1988, the company offers a wide range of financial products and services across the United States, Canada, and the United Kingdom.
It operates through three main segments: credit cards, consumer banking, and commercial banking. Capital One provides credit card products, personal loans, auto financing, and various banking services, including savings accounts, loans, and mortgage lending.
The company has shown stable growth and profitability. Over the past 12 months, its revenue amounted to $26.5 billion, with a net income of $4.2 billion. In the most recent quarter, revenue was $10 billion, a 6.4% increase compared to the same period last year.
Capital One is also actively developing digital technologies to enhance customer experience and expand its services.
2. Discover Financial Services (NYSE: DFS)
Financial Score: 83 / 99
Industry: Credit Services
Dividend increase - 15 Years
Founded in 1960 and headquartered in Riverwoods, Illinois, Discover operates through two main segments: Digital Banking and Payment Services. The company provides
Discover-branded credit cards, personal and home loans, deposit products such as savings and checking accounts, and manages the PULSE network for electronic funds transfers. Discover also owns Diners Club International, offering payment transaction services globally.
Discover has experienced consistent growth in recent years. The company generated revenue of $9.84 billion in the current year, with a quarterly revenue of $5.91 billion.
Despite facing market challenges, Discover’s operating margin stands at 34.26%, and its return on equity is a strong 20.26%. The company has been maintaining profitability and sustainability, with a growing earnings per share (EPS) of $12.42 and a 60.5% annual revenue growth.
Final Thoughts: Should You Buy American Express?
American Express (AXP) shows steady growth: in 2023, revenue reached $56.3 billion (+18%), net income was $6.8 billion (+24%), and EPS grew by 26% to $9.13. The P/E ratio is 17.9, with a dividend yield of 1.4%. The company demonstrates consistent growth and strong prospects for long-term investments.
Current Market Value
Undervalued \ Overvalued \ Fairly valued
Compare competitor companies` P/E ratios to find out if the stocks you`re looking to trade are overvalued. We take the P/E average among competitors.
If a company`s current P/E is 20% or more lower than its competitor`s average, the company is considered undervalued. If it is higher by 20% or more, it is overvalued.
P/E ratio is calculated by dividing the market value per share by the earnings per share (EPS).
⚪️ Fairy valued
Compared to competitors and companies with business in this industry, the company is fairly valued. A price reduction of 15-20% would be a great investment point.
Analysts Consensus
Analysts have mixed recommendations for American Express Company (AXP). As of January 2024, out of 29 analysts, most recommend holding the stock, while some suggest buying or selling.
To your wealth, MaxDividends Team
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