American Express Co.’s (AXP - Free Report) wholly owned subsidiary, AMEX Assurance Company, was recently affirmed Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” by rating giant A. M. Best.
The ratings reflect AMEX Assurance’s impressive operating performance over the last few years. The consistent outperformance of the unit has mainly been supported by its strong earnings. The unit provides insurance products to American Express card members, which in turn, drives its robust income. The company’s inexpensive, direct marketing strategy has helped it to attract customers. Its tailor-made insurance offerings focus on travel related and other ancillary coverage, which has contributed largely to margin expansion.
Apart from its operating efficiency, the unit’s strong financial position owing to its conservative investment risk profile has worked as a catalyst behind this rating affirmation. Its favorable reserve development is another positive.
The outlook for the ratings remains stable, implying that the ratings are not likely to witness any revision in the near term. It also reflects that the unit’s financial and market trends are expected to remain stable in the coming period.
However, the unit remains exposed to a few factors that partially offset the aforesaid positives. The majority of AMEX Assurance businesses are targeted toward American Express cardholders. Given the sluggish growth in policyholders' surplus over the last five years, we do not expect the subsidiary to see much upside. Also, the unit has very little reserve as most of it has been used over the years on paying out dividends.
Zacks Rank and Stocks to Consider:
American Express presently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same industry include Euronet Worldwide Inc. (EEFT - Free Report) , ORIX Corporation (IX - Free Report) and Blackhawk Network Holdings, Inc. . All of the stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
American Express Co.’s (AXP - Free Report) wholly owned subsidiary, AMEX Assurance Company, was recently affirmed Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” by rating giant A. M. Best.
The ratings reflect AMEX Assurance’s impressive operating performance over the last few years. The consistent outperformance of the unit has mainly been supported by its strong earnings. The unit provides insurance products to American Express card members, which in turn, drives its robust income. The company’s inexpensive, direct marketing strategy has helped it to attract customers. Its tailor-made insurance offerings focus on travel related and other ancillary coverage, which has contributed largely to margin expansion.
Apart from its operating efficiency, the unit’s strong financial position owing to its conservative investment risk profile has worked as a catalyst behind this rating affirmation. Its favorable reserve development is another positive.
The outlook for the ratings remains stable, implying that the ratings are not likely to witness any revision in the near term. It also reflects that the unit’s financial and market trends are expected to remain stable in the coming period.
However, the unit remains exposed to a few factors that partially offset the aforesaid positives. The majority of AMEX Assurance businesses are targeted toward American Express cardholders. Given the sluggish growth in policyholders' surplus over the last five years, we do not expect the subsidiary to see much upside. Also, the unit has very little reserve as most of it has been used over the years on paying out dividends.
Zacks Rank and Stocks to Consider:
American Express presently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same industry include Euronet Worldwide Inc. (EEFT - Free Report) , ORIX Corporation (IX - Free Report) and Blackhawk Network Holdings, Inc. . All of the stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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