American Express (NYSE:AXP – Get Free Report) and Netcapital (NASDAQ:NCPL – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.
Volatility and Risk
American Express has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Netcapital has a beta of -0.56, indicating that its share price is 156% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for American Express and Netcapital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Express | 3 | 13 | 10 | 0 | 2.27 |
| Netcapital | 0 | 0 | 0 | 0 | N/A |
Profitability
This table compares American Express and Netcapital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Express | 15.53% | 32.94% | 3.56% |
| Netcapital | -100.71% | -12.80% | -11.48% |
Valuation and Earnings
This table compares American Express and Netcapital”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Express | $63.16 billion | 3.04 | $8.37 billion | $12.14 | 22.02 |
| Netcapital | $3.57 million | 9.69 | -$4.99 million | ($0.05) | -34.60 |
American Express has higher revenue and earnings than Netcapital. Netcapital is trading at a lower price-to-earnings ratio than American Express, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
84.3% of American Express shares are held by institutional investors. Comparatively, 30.7% of Netcapital shares are held by institutional investors. 0.1% of American Express shares are held by insiders. Comparatively, 7.8% of Netcapital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
American Express beats Netcapital on 11 of the 13 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 Netcapital
Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.
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