Affirm vs American Express Which Outperforms?

Affirm Holdings Inc. (AFRM) and American Express Company (AXP) are two prominent players in the financial services industry, but with different business models. Affirm is a fintech company that focuses on providing alternative payment solutions to consumers, while American Express is a traditional credit card issuer known for its premium services. Both companies have experienced growth in recent years, but face unique challenges in the constantly evolving financial sector. Investors looking for exposure to innovative payment solutions may find Affirm attractive, while those seeking stability and dividends may prefer American Express.

Affirm or American Express?

When comparing Affirm and American Express, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Affirm and American Express.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Affirm has a dividend yield of -%, while American Express has a dividend yield of 0.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Affirm reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, American Express reports a 5-year dividend growth of 10.01% year and a payout ratio of 19.64%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Affirm P/E ratio at -50.42 and American Express's P/E ratio at 21.63. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Affirm P/B ratio is 7.93 while American Express's P/B ratio is 7.20.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Affirm has seen a 5-year revenue growth of 4.24%, while American Express's is 0.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Affirm's ROE at -16.49% and American Express's ROE at 34.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $67.78 for Affirm and $301.25 for American Express. Over the past year, Affirm's prices ranged from $22.25 to $72.82, with a yearly change of 227.28%. American Express's prices fluctuated between $177.50 and $307.82, with a yearly change of 73.42%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.