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Analysis of American Express (#AXP)

Analysis of American Express (#AXP)

7 July 2021

American Express is an American financial company. The company’s well-known products are credit cards, payment cards and traveler’s checks. About a third of the revenue comes from foreign operations. In the list of the largest public companies in the world Forbes Global 2000 for 2019, American Express took the 83rd place. It also took the 27th place in the list of the most expensive brands in the world. Such funds as Berkshire Hathaway, The Vanguard Group and State Street Corporation hold significant shares of the company.

The company’s main competitors are Mastercard, Visa and Discover Financial Services.

Revenue for the last quarter: $9.1 B (+22% compared to the same period of the previous year)

Net profit for the last quarter: $2.2 B (+769% compared to the same period of the previous year)

The banking sector was significantly affected by the sharp rate cut in the US in 2020. While banks with a strong investment segment were able to significantly improve their financial performance, the consumer segment of the business did not show the best results. The company certainly has the potential for growth of quotations. However, we should not expect an increase in dividends until 2022 (when there will be the first rate increase).

Thus, # AXP operates in the sector that has not yet recovered from the coronavirus restrictions in the United States. Moreover, the current annual forward yield on the company’s shares is only 1%, which is a low indicator for the banking sector.

7 July 2021
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