American Express (NYSE:AXP) and Dave (NASDAQ:DAVE) Critical Review

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

Risk & Volatility

American Express has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Dave has a beta of 4.07, suggesting that its share price is 307% more volatile than the S&P 500.

Valuation & Earnings

This table compares American Express and Dave”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Express	$77.59 billion	2.77	$10.83 billion	$17.76	18.08
Dave	$690.63 million	5.15	$195.87 million	$12.38	22.50

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

Profitability

This table compares American Express and Dave’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Express	15.80%	34.19%	3.83%
Dave	28.15%	59.86%	28.08%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for American Express and Dave, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Express	1	13	17	1	2.56
Dave	0	4	14	0	2.78

American Express presently has a consensus price target of $365.22, suggesting a potential upside of 13.77%. Dave has a consensus price target of $425.69, suggesting a potential upside of 52.80%. Given Dave’s stronger consensus rating and higher probable upside, analysts clearly believe Dave is more favorable than American Express.

Institutional and Insider Ownership

84.3% of American Express shares are held by institutional investors. Comparatively, 18.0% of Dave shares are held by institutional investors. 0.1% of American Express shares are held by insiders. Comparatively, 23.6% of Dave shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Dave beats American Express on 9 of the 15 factors compared between the two stocks.

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.

About Dave

Dave, Inc. is a digital banking service. Its products include a budgeting tool to help members manage their upcoming bills to avoid overspending, cash advances through its flagship ExtraCash product to help members avoid punitive overdraft fees, a Side Hustle product, where Dave helps connect members with supplemental work opportunities, and Dave Banking, a modern checking account experience with valuable tools for building long-term financial health. The company was founded by Jason Wilk, Paras Chitrakar, and John Wolanin in October 2015 and is headquartered in Los Angeles, CA.