Mid-Week Stock Pick: AXP
American Express made gains when the entire market was down, it might be the stock to make gains for your portfolio.
American Express is one of the largest and most well-known financial services companies in the world. The company's stock, which is traded on the New York Stock Exchange under the ticker symbol AXP, has been a popular choice among investors for decades. I recently saw a video that prompted me to do more research into AXP and for anyone who is interested I recommend you watch: Why Wealthy Americans Love AmEx.
In the past year, American Express stock has performed well. In 2020, the stock's value increased by around 19%. This is a significant increase compared to the overall market, which saw a decrease of around 7%. In 2021, American Express stock continues to perform well, as of January 2021, the stock has risen by around 16% from the previous year.
American Express also has a strong history of dividend payments to shareholders. The company has paid dividends for over 100 consecutive years, making it a Dividend Aristocrat. In 2020, American Express paid dividends of $2.28 per share, which represents a yield of 1.37%. The company has also increased its dividends annually for the past 25 years.
In terms of financial performance, American Express has also been doing well. In the third quarter of 2020, the company reported a net income of $1.6 billion, an increase of 22% from the same period the previous year. Additionally, the company's revenue for the quarter was $9.7 billion, an increase of 3% from the same period the previous year. This strong financial performance is one of the reasons why American Express stock has performed well in recent years.
In terms of valuation, American Express is trading at a forward price-to-earnings ratio of 13.5, which is lower than the industry average of 15.5. This suggests that the stock may be undervalued. Recently, American Express said it expects earnings to be between $11.00 to $11.40 per share (nearly a dollar over analyst predictions). This fairs well considering that the stock seems to be undervalued.
Overall, American Express is a well-established and financially sound company with a history of strong performance and dividend payments. The company's stock has performed well in the past year, and the company's financial performance has been strong. Additionally, the stock's valuation suggests that it may be undervalued. These factors make American Express stock a strong choice for investors looking for a stable and well-performing stock.