American Express.
A quick look at the elements showing this company now professions may 12 x forward earnings, price book value and projected EPS growth 3.29 of 5% next year. It is also important to mention is the high debt to equity ratio of 3.58. It’s a scarily high number, look at the total debt of more than 5 years, had little to show that concerned with the Administration to pay this debt. Low rates for a while, but even at a low interest company still throwing money out the window, fixed payments.
Next discover card financial services (DFS).
Foundations for the Discover card is a bit more than that with a forward price and debt capital ratio of 8.79 2.4 of AXP. DFS subjects under book value twice on 1.92. Also, about the company per share cash from 8.95. This list should help the company reduce its debt and secure the financial stability of the company.
MasterCard.
Company # 2 requiring peace to market share, company fundamental data are extreme. Degree subjects now to 2 times the price of two previous companies. His multiple revenue is 14.26 justified this by the growth of 18% of the company expected EPS over five years, next year. The company has no debt which improves the financial stability of the company, and on the part of the outstanding $ 28 per share cash. This money on hand is equal to 8% of the stock price. This leads me to believe that the company may be planning a significant share buyback and/or increase the current dividend or to announce a special dividend. The negative side, the company’s book value professions 8 times he over-pricing is very large, which may cause some selling pressure to move forward.
Visa.
Visa is the # 1 company on the market, now trading at times forward earnings 15.91, and there is no income/debt.
Visa also has the high price was justified by growth next year of 15%, with a growth rate of 5 years of 18%. Visa has a 4.68 per share cash on it can use it to continue the ongoing share buyback plans.
Intangibles
AXP is one of the few tickets still charge its users the card, prices are not cheap. A recent company focused on promoting its brand, by waiving the annual payment that should help spur growth, but the key to the success of the company is or is not able to hold these clients to generate revenue.
DFS is more than the credit card company, is a financial services company. Over 70% of all credit card users declared by they use the company’s Web site to pay bills or monitoring their statements. By using this, first is the ability to promote his business-financial services such as online banking and CD-ROMs. This area may offer an opportunity for growth that is not available using DFS membership card.
What I went into my decision:
1. visa has the largest circulation, credit debit cards – almost double its next competitor, MasterCard. It has a potential global growth is already implemented and the process of reaching and then untapped markets, to be unique throughout the world, such as curcumstances India, which debit cards, credit cards, are the main medium for payment.
2. MasterCard capable (and has already begun) to expand abroad, but really need to break through since visa already has a large advantage 2: 1 bachrtisim issued. Apply for credit cards with the best deals and offers
3. Discover card has great potential to increase horizontal with its online banking division, but the vertical growth in credit cards, I see it mastercard credit card will be difficult.
4. American Express will not be part of a great future if it does not pay down debt change its business model. The changing economic times, so American Express change its business model to phase out annual payment cards. When it comes time for businesses, especially small businesses, to cut costs and to find savings wherever they can find an alternative to American Express is no brainer.