American Express Return On Equity vs. Operating Margin
| AXPB34 Stock | BRL 182.79 2.14 1.16% |
For American Express profitability analysis, we use financial ratios and fundamental drivers that measure the ability of American Express to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well American Express utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between American Express's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of American Express over time as well as its relative position and ranking within its peers.
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American Express Operating Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining American Express's current stock value. Our valuation model uses many indicators to compare American Express value to that of its competitors to determine the firm's financial worth. American Express is number one stock in return on equity category among its peers. It also is number one stock in operating margin category among its peers reporting about 0.58 of Operating Margin per Return On Equity. The ratio of Return On Equity to Operating Margin for American Express is roughly 1.72 . Comparative valuation analysis is a catch-all model that can be used if you cannot value American Express by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for American Express' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.American Operating Margin vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
American Express |
| = | 0.32 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
American Express |
| = | 0.19 % |
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
American Operating Margin Comparison
American Express is currently under evaluation in operating margin category among its peers.
American Express Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in American Express, profitability is also one of the essential criteria for including it into their portfolios because, without profit, American Express will eventually generate negative long term returns. The profitability progress is the general direction of American Express' change in net profit over the period of time. It can combine multiple indicators of American Express, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide. American Express Company was founded in 1850 and is headquartered in New York, New York. AMERICAN EXPDRN operates under Credit Services classification in Brazil and is traded on Sao Paolo Stock Exchange. It employs 63700 people.
American Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on American Express. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of American Express position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the American Express' important profitability drivers and their relationship over time.
Use American Express in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if American Express position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Express will appreciate offsetting losses from the drop in the long position's value.American Express Pair Trading
American Express Pair Trading Analysis
The ability to find closely correlated positions to American Express could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace American Express when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back American Express - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling American Express to buy it.
The correlation of American Express is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as American Express moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if American Express moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for American Express can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your American Express position
In addition to having American Express in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Baby Boomer Prospects Thematic Idea Now
Baby Boomer Prospects
Equities with large market capitalization that account for significant contribution to overall economic growth especially within dividend-paying instruments and stocks from healthcare and financial sectors. The Baby Boomer Prospects theme has 99 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Baby Boomer Prospects Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in American Stock
When determining whether American Express is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if American Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about American Express Stock. Highlighted below are key reports to facilitate an investment decision about American Express Stock:Check out Trending Equities. For information on how to trade American Stock refer to our How to Trade American Stock guide.You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
To fully project American Express' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of American Express at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include American Express' income statement, its balance sheet, and the statement of cash flows.