Amex plans a big buyback

Article Excerpt

AMERICAN EXPRESS CO. $80 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $80.0 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.americanexpress.com) has raised its quarterly dividend by 11.5%, to $0.29 a share from $0.26. The new annual rate of $1.16 yields 1.5%. Amex also plans to repurchase up to $6.6 billion worth of its stock by June 30, 2016, up 50.0% from $4.4 billion in 2014. The company’s 2015 earnings will probably fall to $5.49 a share from $5.56 in 2014. However, Amex’s current restructuring plan, which includes a 6% cut to its workforce, could push its earnings up to $6.00 a share in 2016. The stock trades at 13.3 times that estimate. American Express is a buy. …

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