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American Express Co Forward Rate of Return (Yacktman) %

: 15.72% (As of Jun. 2022)
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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. American Express Co's forward rate of return for was 15.72%.

The historical rank and industry rank for American Express Co's Forward Rate of Return (Yacktman) % or its related term are showing as below:

AXP' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 12.2   Med: 17.42   Max: 25.99
Current: 14.25

During the past 13 years, American Express Co's highest Forward Rate of Return was 25.99. The lowest was 12.20. And the median was 17.42.

AXP's Forward Rate of Return (Yacktman) % is ranked better than
72.19% of 374 companies
in the Credit Services industry
Industry Median: 4.60 vs AXP: 14.25

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


American Express Co Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for American Express Co's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

American Express Co Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Forward Rate of Return (Yacktman) %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 15.18 15.57 14.67 13.98 13.89

American Express Co Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Forward Rate of Return (Yacktman) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.62 13.36 13.89 12.87 15.72

Competitive Comparison

For the Credit Services subindustry, American Express Co's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

American Express Co Forward Rate of Return (Yacktman) % Distribution

For the Credit Services industry and Financial Services sector, American Express Co's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where American Express Co's Forward Rate of Return (Yacktman) % falls into.



American Express Co Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

American Express Co's Forward Rate of Return of Jun. 2022 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year Book Value Growth Rate
=12.8967619/138.62+0.0642
=15.72 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


American Express Co  (NYSE:AXP) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of Book Value per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


American Express Co Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of American Express Co's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


American Express Co Business Description

American Express Co logo
Address
200 Vesey Street, New York, NY, USA, 10285
American Express is a global financial institution, operating in about 130 countries, that provides consumers and businesses charge and credit card payment products. The company also operates a highly profitable merchant payment network. Since 2018, it has operated in three segments: global consumer services, global commercial services, and global merchant and network services. In addition to payment products, the company's commercial business offers expense management tools, consulting services, and business loans.
Executives
Radhakrishnan Ravikumar officer: Chief Information Officer 200 VESEY STREET NEW YORK NY 10285
Nigro David officer: Chief Risk Officer 200 VESEY STREET NEW YORK NY 10285-5001
Pickrum Lisa W director 5900 RYLAND DRIVE BETHESDA MD 20817
Baltimore Thomas J Jr director PARK HOTELS & RESORTS INC. 1775 TYSONS BLVD, 7TH FLOOR TYSONS VA 22102
Phillips Jr Charles E director 113 WEST 88TH STREET NEW YORK NY 10024
Lieberman Quinn Jessica officer: Controller 200 VESEY STREET NEW YORK NY 10285
Parkhill Karen L director 1717 MAIN STREET, MC 6402 DALLAS TX 75201
Pike Lynn A director 200 VESEY STREET NEW YORK NY 10285
Skyler Jennifer officer: Chief Corp. Affairs Officer 200 VESEY STREET NEW YORK NY 10285
Joabar Raymond officer: CRO and Pres., GRBC 200 VESEY STREET NEW YORK NY 10285
Herena Monique officer: Chief Human Resources Officer 225 LIBERTY STREET NEW YORK NY 10286
Marrs Anna officer: Pres., Global Comm. Services 200 VESEY STREET 01-49-13 NEW YORK NY 10285
Vitale Gabrielle officer: Interim CRO and Pres, GRBC Grp 200 VESEY STREET NEW YORK NY 10285
Petrino Richard officer: EVP - Corporate Controller 200 VESEY STREET NEW YORK NY 10285
Young Christopher David director C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399

American Express Co Headlines

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