American Express (AMEX) It is one of the three main cards on the market along with Rg-A Visa y Mastercard Rg-A. Despite being behind those mentioned, it stands out above thanks to being a luxury credit card. Without forgetting a dividend with a yield of 0.9%, below average, with four payments of $0.82 quarterly or $3.28 annually and a aggressive share buyback program that during the third quarter repurchased around 2.3 billion dollars in shares (7.3 million purchased). Representing more than 25 billion dollars spent on buybacks in the last five years, according to Stefon Walters en Yahoo Finance.
AMEX’s business justifies these measures
One thing is certain: Investors don’t have to worry about the sustainability of AMEX’s growing dividend and share buybacks. In the third quarter, its $0.82 dividend represented only about 19% of its diluted earnings per share (EPS) for the quarter ($4.14).
AMEX states that it expects the BPA for the entire year is between 15.20 and 15.50 dollarsmore than enough to cover the $3.28 that he paid. This leaves you with enough money to continue investing and expanding the business.
AMEX is behind Visa and Mastercard in cards and acceptance globally, but this is intentional. The firm has positioned itself as the luxury credit card company, relying on its advantages to attract and retain customers. This premium brand image has placed it in a commercial position unique and lucrative.
First, customers are willing to pay extremely high annual commissions to access the card’s premium benefits. This provides a guaranteed income that basically works like a subscription.
It is also beneficial that AMEX operates its own payment network and issue your own cardsallowing you to generate income from transactions, interest on balances and trading commissions. On the other hand, Visa and Mastercard operate the payment networks, but an independent bank issues the cards.
Why is AMEX a good option right now?
AMEX has positioned itself well for long-term success, starting with its dedication to attracting and retaining younger customers. Around the 64% of new accounts worldwide were opened by millennial or generation Z customers. In addition, he also observed that these clients make around a 25% more transactions than other customers.
With shareholder-friendly dividends and share buybacks, premium branding, cash flow and long-term prospects, AMEX is a great option for those looking to add a blue-chip stock to their portfolio.
American Express It closed last week higher at $364.79. The 70-period moving average crosses the last five candles, RSI up at 45 points and the MACD fast line (blue) below the zero level.
Medium and long-term resistance is at $387.36. Meanwhile, Ei indicators are mixed.