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American Express is a global financial services company that specializes in payment cards and travel-related services around the world. The company has long been one of the favorites for long-term investors, as it has enjoyed massive growth over the years, as well as stable profitability and competitive dividend yields.
Founded in 1850 as a delivery company in Buffalo, New York, the company has gone through several overhauls of its business - finally emerging as a modern financial services company that is well-known all around the world.
While the 2022 bear market and conservative consumer spending have had their impact on AMX’s shares, the long-term returns delivered by the company still attract thousands of investors towards the stock every day. With the uncertain financial climate of 2023, investors are wondering whether they would be able to buy AMX stock at a discount before the market marks a turnaround. While American Express may be overly dependent on consumer spending habits, it has a robust customer base and continues to grow steadily over the years.
American Express has been one of the top-performing stocks of the past five years, returning over 75% over the same period. The stock took a beating during the Covid-19 lockdowns, as consumers tried to cut down spending, which hurt the company’s short-term bottom line.
However, the company has managed to quickly regain lost ground since the lockdown measures were lifted, which was further boosted by the government stimulus checks that went towards getting consumer confidence back to the markets.
American Express is an attractive stock for both, long-term investors and short-term traders, for three key reasons:
The stock performance of AXP throughout the past year has left more to be desired, as the stock has lost 12% of its value, which is to be expected, as bearish sentiment and increased bond yields sink the market lower. In financial terms, the Q4 2022 report was mixed for American Express:
Investors would hope for American Express to return to its surgeon growth rate in the near future, but the likelihood of that seems slim until the broader market also swings higher.
While investing in AMX stock may seem like a no-brainer to some investors, much of its performance depends on broader market trends. However, investors must also consider the long-term advantages and disadvantages of buying AXP shares before putting their capital at risk.
American Express stock has enjoyed substantial growth over the past five years. With uncertain global economic conditions, American Express’ stock is heavily dependent on interest rates and consumer confidence, which is unlikely to see much growth in the short term. However, the stock could be one of the top gainers once the stock market turns around again.
American Express stock has a dividend yield of 1.49% and the company pays $0.60 per share as quarterly dividends - making it an attractive choice for dividend investors as well.
As of April 2023, American Express had a market capitalization of $120 billion - making it one of the largest financial services companies in the world.