![]() However, to date, neither carrier has reinstated MBG for the more widely-used Ground and 2-3 Day Air networks. Generally, this was seen as a very positive sign that COVID’s impact on expected time-in-transit was decreasing. ![]() After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.In April, FedEx and UPS reinstated Money Back Guarantees (MBG) for on-time delivery on various express services, mainly Next Day Air and International Express packages. When our analyst team has a stock tip, it can pay to listen. In March, the board of directors authorized a share-repurchase program for up to 120 million shares.ġ0 stocks we like better than American Express American Express Chief Financial Officer Jeffrey Campbell said in the company's first-quarter update that the company plans to continue to aggressively buy back its shares. Management certainly seems to think shares are a good value. With management guiding for double-digit revenue growth and the stock trading at just 16 times earnings, investors may want to seriously consider buying shares of this stock. In addition, a low payout ratio means there's a lot of room for dividend growth.Ĭonsidering all of these factors, the stock's recent pullback looks like a good buying opportunity. This leaves plenty of wiggle room for the current dividend, even if earnings take a hit. In other words, the company paid out only 16% of its trailing-12-month earnings in dividends. ![]() In addition, American Express operates with a low payout ratio of just 16%. It announced a 15% increase earlier this year. The credit card company currently has a dividend yield of 1.6%. These negative factors could combine to be a major headwind for American Express.īut one thing that could help offset some of this potential turbulence is the company's strong dividend. A recession could lead to both lower spending and higher delinquencies - a potential double whammy for the company. It's normal for investors to fret about the viability of liability-sensitive financial companies during challenging macroeconomic environments. "Our customers have been resilient thus far in the face of slower growth and higher inflation economic environment." An exceptional dividendĭespite the company's strong financial performance lately, the stock will likely continue to be volatile. "On credit, our metrics remain best-in-class, supported by the premium nature of our customer base, our strong risk management capabilities and the thoughtful underwriting actions we've taken on an ongoing basis," said American Express CEO Stephen Squeri in the company's first-quarter earnings release. Therefore, not only does the company's premium customer base help it earn more per customer, but it reduces the risk of delinquencies during challenging macroeconomic periods. ![]() cardmembers boast 55% lower delinquency rates. American Express management said in its 2022 Investor Day presentation that its card members spend an average of three times more per card than other networks and U.S. ![]() Investors should also keep in mind that the company's customer, on average, is wealthier than customers of other credit card companies. Further, management reiterated its full-year guidance for total 2023 revenue to increase 15% to 17% year over year. First-quarter revenue increased 22% year over year - an acceleration from 17% growth in Q4. If we're on the brink of a recession, you wouldn't know it by the company's first-quarter results. ![]()
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