Critical Review: American Express (NYSE:AXP) versus ZIP (OTCMKTS:ZIZTF)

ZIP (OTCMKTS:ZIZTF) and American Express (NYSE:AXP) are both financial services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

84.3% of American Express shares are held by institutional investors. 0.1% of American Express shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares ZIP and American Express”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZIP	N/A	N/A	N/A	N/A	N/A
American Express	$63.16 billion	3.21	$8.37 billion	$12.14	23.19

American Express has higher revenue and earnings than ZIP.

Analyst Ratings

This is a summary of recent ratings and price targets for ZIP and American Express, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZIP	0	0	0	0	N/A
American Express	4	15	8	0	2.15

American Express has a consensus target price of $242.33, suggesting a potential downside of 13.84%. Given American Express’ higher probable upside, analysts clearly believe American Express is more favorable than ZIP.

Profitability

This table compares ZIP and American Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZIP	N/A	N/A	N/A
American Express	15.53%	32.94%	3.56%

Summary

American Express beats ZIP on 8 of the 8 factors compared between the two stocks.

About ZIP

Zip Co Limited engages in the provision of digital retail finance and payments solutions to consumers, and small and medium sized merchants (SMEs) in Australia, New Zealand, Canada, and the United States. The company offers Buy Now Pay Later services, which offer line of credit and installment products to consumers through online and in-store. It also provides unsecured loans and lines of credit to SMEs. The company was formerly known as ZipMoney Limited and changed its name to Zip Co Limited in December 2017. Zip Co Limited was incorporated in 2009 and is headquartered in Sydney, Australia.

About American Express

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company’s products and services include credit card, charge card, banking, and other payment and financing products; network services; expense management products and services; and travel and lifestyle services. It also provides merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. In addition, the company operates lounges at airports under Centurion Lounge brand name. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.