Ally Financial vs American Express Which Is More Favorable?

Ally Financial and American Express are two prominent financial companies that have been dominating the stock market for years. Ally Financial is a leading digital financial services company that offers a wide range of banking, automotive finance, and online retail banking services. On the other hand, American Express is a global payment and travel company known for its credit card services and financial products. Both companies have experienced growth and success in the market, making them attractive options for investors looking to diversify their portfolios. In this comparison, we'll explore the key factors that differentiate Ally Financial vs American Express stocks.

Ally Financial or American Express?

When comparing Ally Financial 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 Ally Financial 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. Ally Financial has a dividend yield of 3.13%, while American Express has a dividend yield of 0.9%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ally Financial reports a 5-year dividend growth of 16.47% year and a payout ratio of 54.41%. 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 Ally Financial P/E ratio at 13.34 and American Express's P/E ratio at 21.51. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ally Financial P/B ratio is 0.80 while American Express's P/B ratio is 7.16.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ally Financial has seen a 5-year revenue growth of 1.15%, while American Express's is 0.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ally Financial's ROE at 6.31% 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 $38.17 for Ally Financial and $300.32 for American Express. Over the past year, Ally Financial's prices ranged from $29.05 to $45.46, with a yearly change of 56.49%. American Express's prices fluctuated between $167.57 and $307.82, with a yearly change of 83.70%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.