Amex has plenty of room to grow

Article Excerpt

AMERICAN EXPRESS CO. $89 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $89.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www. americanexpress.comtarget=”_blank”) started up in 1850 and is now one of the world’s largest issuers of payment cards, with 109.9 million cards outstanding in over 130 countries. Billionaire investor Warren Buffett owns 14.3% of the company. Amex issues two types of cards: charge cards, which have no preset spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance. High-quality clientele cuts risk Unlike Visa and MasterCard, which simply process transactions, Amex is also a bank that accepts deposits and makes loans. The company cuts its credit risk by mainly catering to clients with above-average incomes and good credit histories. In the latest quarter, it wrote off just 1.8% of its U.S. loans, compared to 2.2% a year earlier. Its international…

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