American Express vs Global Payments Which Is More Favorable?

American Express and Global Payments are two leading companies in the financial services sector, with each offering unique opportunities for investors. American Express is well-known for its iconic credit card brand and strong global presence, while Global Payments specializes in payment processing solutions for businesses worldwide. Both companies have seen growth in recent years, but investors must carefully consider factors such as market volatility, regulatory changes, and competition when evaluating their stocks. This comparison will delve into the financial performance, opportunities, and risks associated with investing in American Express vs Global Payments stocks.

American Express or Global Payments?

When comparing American Express and Global Payments, 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 American Express and Global Payments.

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. American Express has a dividend yield of 0.94%, while Global Payments has a dividend yield of 1.08%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. American Express reports a 5-year dividend growth of 10.01% year and a payout ratio of 19.64%. On the other hand, Global Payments reports a 5-year dividend growth of 90.37% year and a payout ratio of 18.71%.

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 American Express P/E ratio at 20.53 and Global Payments's P/E ratio at 21.71. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. American Express P/B ratio is 6.84 while Global Payments's P/B ratio is 1.30.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, American Express has seen a 5-year revenue growth of 0.74%, while Global Payments's is 0.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Express's ROE at 34.09% and Global Payments's ROE at 6.04%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $285.50 for American Express and $115.19 for Global Payments. Over the past year, American Express's prices ranged from $159.91 to $296.83, with a yearly change of 85.62%. Global Payments's prices fluctuated between $91.60 and $141.78, with a yearly change of 54.78%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.