AXPNEUTRAL

Return on Equity (ROE)

34.4%

Higher than 90% of Financial Services sector peers

Updated 464h ago

Sector Performance

90th percentile

AXP

34.4%

Sector Median

12.9%

Sector Avg

17.5%

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Deep Analysis

American Express’s current Return on Equity (ROE) of 34.4% means that for every dollar of shareholders’ equity, the company generated $0.344 in profit over the past year—a measure of how efficiently it uses investor capital.

This level far exceeds the sector median of 12.4%, placing American Express in the 91st percentile among Financial Services peers. The year-over-year change is not available, but the quarter-over-quarter change shows a +6.2% improvement, and the two most recent values (34.4% versus 32.4%) indicate an upward move from the prior period. The combination of a very high ROE and a positive short-term trend points to strong profitability that reduces investment risk relative to the sector, though the lack of a longer trend history limits the opportunity signal. This metric supports the overall NEUTRAL verdict because the exceptional ROE aligns with a stable, high-quality business, yet the limited trend data and the neutral rating suggest other factors offset this strength.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about AXP?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does AXP's Return on Equity (ROE) compare to its sector?

AXP's Return on Equity (ROE) of 34.4% compares to a Financial Services sector median of 12.9%, placing it in the 90th percentile.

Who are AXP's closest peers by Return on Equity (ROE)?

The closest Financial Services peers by Return on Equity (ROE) include: BLK (11.9%), RF (11.9%), HSBC (11.6%), GOLD (10.8%), PRU (10.7%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.