Is American Express a Buy Now?

December 13, 2012

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E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for American Express is very high. Based on the information below, you might think this is normal for the industry, but MasterCard and Visa both have debt-to-equity ratios of zero.

	Debt-To-Equity	Cash	Long-Term Debt
AXP	3.32	$3.99 Billion	$60.30 Billion
COF	.97	$6.73 Billion	$37.41 Billion
DFS	2.13	$6.54 Billion	$19.25 Billion

T = Technicals on the Stock Chart Are Good

As stated earlier, the stock has performed well of late. Capital One Financial has seen similar returns during the same time periods while Discover Financial Services has blown them both out of the water (aside from the past month.)

	1 Month	Year-To-Date	1 Year	3 Year
AXP	3.84%	23.95%	22.09%	48.48%
COF	1.04%	38.66%	29.88%	46.71%
DFS	-.39%	72.27%	71.48%	161%

At 57.67, American Express is currently trading above all its averages.

50-Day SMA	56.49
100-Day SMA	56.90
200-Day SMA	56.93

E = Earnings and Revenue Are Inconsistent

Annual earnings and revenue have bounced back since 2010.

	2007	2008	2009	2010	2011
Revenue ($)in billions	31.54	31.92	26.54	30.00	32.28
Diluted EPS ($)	3.34	2.32	1.54	3.35	4.12

The previous quarter showed an improvement in both revenue and earnings on a YoY basis.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	8.15	8.32	8.19	8.52	8.42
Diluted EPS ($)	1.03	1.02	1.07	1.15	1.09

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