Between American Express, Visa, and Mastercard, there is no doubt that American Express has the worst growth characteristics of the three. Visa has been busy penetrating the European markets to keep its trajectory of 13% annual growth in line, and Mastercard stays a close second with its trajectory of 10-12% earnings growth. Both of these credit-oriented corporations are likely to have long-term earnings growth that is doubled what you will see from the S&P 500.
And then there is American Express. For the next five years, it is only expected to grow earnings in the 5-7% range. Its growth is not nearly as attractive as Visa and Mastercard.
And yet, it has been the focus of my attention this year because of its dirt-cheap valuation. On January 22nd, I wrote “Classic Value Investing Right Now: American Express Stock At $55.” The reason why it caught my attention is … Read the rest of this article!