Critical Comparison: American Express (NYSE:AXP) & Euronet Worldwide (NASDAQ:EEFT)

Euronet Worldwide (NASDAQ:EEFT) and American Express (NYSE:AXP) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Analyst Ratings

This is a summary of current ratings and recommmendations for Euronet Worldwide and American Express, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Euronet Worldwide	2	2	3	0	2.14
American Express	1	13	8	0	2.32

Euronet Worldwide presently has a consensus target price of $95.00, suggesting a potential upside of 40.47%. American Express has a consensus target price of $357.47, suggesting a potential upside of 14.23%. Given Euronet Worldwide’s higher probable upside, equities research analysts plainly believe Euronet Worldwide is more favorable than American Express.

Profitability

This table compares Euronet Worldwide and American Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Euronet Worldwide	7.15%	28.37%	5.74%
American Express	15.13%	33.95%	3.73%

Earnings and Valuation

This table compares Euronet Worldwide and American Express”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Euronet Worldwide	$4.24 billion	0.61	$309.50 million	$6.93	9.76
American Express	$72.23 billion	2.96	$10.83 billion	$16.03	19.52

American Express has higher revenue and earnings than Euronet Worldwide. Euronet Worldwide is trading at a lower price-to-earnings ratio than American Express, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Euronet Worldwide has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, American Express has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Institutional & Insider Ownership

91.6% of Euronet Worldwide shares are held by institutional investors. Comparatively, 84.3% of American Express shares are held by institutional investors. 12.2% of Euronet Worldwide shares are held by insiders. Comparatively, 0.1% of American Express shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

American Express beats Euronet Worldwide on 10 of the 14 factors compared between the two stocks.

About Euronet Worldwide

Euronet Worldwide, Inc. provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers, and individual consumers worldwide. It operates through three segments: Electronic Fund Transfer Processing, epay, and Money Transfer. The Electronic Fund Transfer Processing segment provides electronic payment solutions, including automated teller machine (ATM) cash withdrawal and deposit services, ATM network participation, outsourced ATM and point-of-sale (POS) management solutions, credit and debit and prepaid card outsourcing, card issuing, and merchant acquiring services. It also offers ATM and POS currency conversion, ATM surcharge, advertising, customer relationship management, mobile top-up, bill payment, fraud management, foreign remittance and cardless payout, banknote recycling, and tax-refund services; and integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems. The epay segment distributes and processes prepaid mobile airtime and other electronic payment products; and provides payment processing services for various prepaid products, cards, and services, as well as vouchers and physical gift fulfillment, and gift card distribution and processing services. This segment operates a network of approximately 821,000 POS terminals. The Money Transfer segment offers consumer-to-consumer and account-to-account money transfer, customers bill payment, check cashing, foreign currency exchange, mobile top-up, and cash management and foreign currency risk management services, as well as payment alternatives, such as money orders and prepaid debit cards. The company was formerly known as Euronet Services, Inc. and changed its name to Euronet Worldwide, Inc. in August 2001. Euronet Worldwide, Inc. was founded in 1994 and is headquartered in Leawood, Kansas.

About American Express

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company’s products and services include credit card, charge card, banking, and other payment and financing products; network services; expense management products and services; and travel and lifestyle services. It also provides merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. In addition, the company operates lounges at airports under Centurion Lounge brand name. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.