Buffett Brain · Research note
Score updated 23 Oct 2026 · analysis from 2 Jun 2026
AXP· Financial Services
American Express
American Express owns a premium spending club, yet it lends its own money and earns only 8.9 percent on capital.
Buffett fit
Partial fit
Owner
56
Durability
95
Management
82
Price
63
Score updated 23 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of American Express, I would like what the brand does for me.
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This is the strongest leg of the business, and the durability score of 95 says so.
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Management here has earned its 82 score. runs at 1.48 times reported net income, so the earnings are real cash and not accounting paper.
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Here is where I sit on my hands. At a near 19.3 and an yield of about 7.4 percent, the price is fair for a fine business but it is not a gift, and the plain earnings yield of 5.2 percent is barely better than a Treasury for a company that carries credit risk.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1Exceptional brand , with an 83.5 percent and a 20.7 percent that few financial firms can touch.
- 2Top tier durability, scoring 95, with the worst annual earnings decline only 1.8 percent across the cycle.
- 3Strong revenue at 16 percent and earnings per share growth of 11.3 percent.
- 4Disciplined shrinking the share count about 3.1 percent a year, raising each owner's stake.
Concerns
7- 1Return on capital has fallen to 8.9 percent on a trailing basis from a five year average of 11.8 percent, a sign newer capital earns less.
- 2Thin interest coverage of 2.07 times leaves little room if borrowing costs rise or earnings dip.
- 3A current ratio of 0.35 reflects the bank like balance sheet and offers scant near term cushion.
- 4 of 1.78 is high, a reminder this is a credit lender and not just a toll taker.
Price history
$325+87.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
American Express runs a closed-loop card network where it is the brand, the bank, and the network all at once, and it gets paid three ways: swipe fees from merchants, annual fees from cardholders, and interest on the balances it carries. That integration shows up in an 83.5 percent and a 20.7 percent , fat numbers for a financial firm. Revenue has compounded at 16 percent, but a good slice of those earnings is interest income, which means the company is renting out its own balance sheet to make them.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Financial Services
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