The 2019 fourth-quarter American Express earnings, announced in January has beaten the expectations of Wall Street. With the credit card firm’s regulated yearly profit growing 12% higher in 2019 than the previous year, the news was received well by the company and its shareholders.
If you made an investment with American Express worth $1,000 a decade ago, that investment would be over $4,000 on February 18, for total revenue of 301%, as per the calculations of CNBC. By contrast, in a similar time frame, the S&P 500 took home just a total revenue of more than 275%.
American Express’s present-day stock value was slightly over $129 on February 24, dropping over 4% in morning exchange amid growing concerns of the economic consequences of COVID-19. While the credit card company shares have performed well through the years, past accomplishments aren’t indications of future outcomes.
How American Express Started
American Express dates all the way back to 1850 when it began as a cargo shipping business. It was only in the 1950s when the company started offering financial products and services, and Amex made its very first customer charge card.
In 1966, it began producing business card plans. In 1991, developed its first loyalty plan, which is now called Membership Rewards, serving to incentivize customers with benefits and promote membership loyalty.
Since then, American Express has maintained its reiteration of financial offerings through debit and credit card lines together with banking services. Presently, it’s one of the globe’s most prominent financial corporations with over 63 million cardholders.
All The Talk ABout Stock Performance
Over the years, American Express stock has gone through a roller coaster ride of its own. Like other financial establishments, its stock sank during the 2008 recession, with its share price landing at only about $11 by February 2009.
In February 2015, the market value of the company fell to approximately $8 billion in just 48 hours after it declared losing a lucrative Costco contract set to lapse in March 2016.
Then, Kenneth Chenault, the chairman and CEO of American Express for 17 years, stepped down in February 2018 as the company struggled to find its footing in the modern market.
Despite all these obstacles, Amex stock rallied 5.4% yearly under Chenault’s tenure, which is around double the 2.6% yearly profit of the economic sector at the time.
American Express Today!
American Express credits its Q4 victory to the “well-balanced mix” it has struck halfway through spending fees and lending funds. The card issuing company stated that almost 70% of 2019’s new cardmembers got fee-based goods, which grew card fee profits by 17% in the previous year.
Also, millennials are some of Amex’s biggest fans, signing up 50% of the new cards. In January, CNBC’s Jim Cramer thanked young folks for helping the corporation attain its better-than-anticipated quarter.
If you’re thinking about going into investing, experts like Warren Buffett usually recommend beginning with index funds, which contain several companies. Index funds aren’t bound to a single business’s performance, making them less precarious than individual stocks, which is safer for beginners.