American Express (NYSE:AXP) is introducing a series of changes to its Business Gold Card in a bid to cater to the flourishing small business sector in the era of remote work. The company's strategy appears to align with the significant rise in business applications, which surged by 42% in 2022, according to census data.
Anna Marrs, group president at American Express, confirmed the introduction of new benefits for cardholders. These include coverage for purchases of electronics and wireless services. The move is seen as an effort to better serve small businesses, many of which have shifted to remote operations amidst the ongoing global health crisis.
InvestingPro data reveals that American Express, with a market cap of $110.09B USD, is a prominent player in the Consumer Finance industry. The company has been profitable over the last twelve months with a revenue of $53.01B USD, a growth of 10.52% in the last twelve months (LTM2023.Q2). The company's P/E ratio stands at 15.11, indicating a high earnings quality.
The company is also responding to this trend with an increase in the annual fee for the Business Gold Card to $375. This increase, however, is offset by potential credits that cardholders can avail themselves of. These include an annual $240 credit at FedEx Corp (NYSE:FDX)., Grubhub (NYSE:GRUB) Holdings Inc., and various office-supply stores. Such incentives are expected to appeal to small businesses seeking cost-effective solutions for their operational needs.
InvestingPro Tips suggests that American Express yields a high return on invested capital and has maintained dividend payments for 53 consecutive years. This financial stability, coupled with the fact that the company's liquid assets exceed short-term obligations, makes it an attractive choice for investors and customers alike.
In a further nod to the small business sector, American Express has introduced a Rose Gold card design specifically for these businesses. This addition is seen as a symbolic gesture of the company's commitment to supporting small businesses during these challenging times.
The revamp of the Business Gold Card comes at a time when American Express seeks to tap into the rapidly growing small business sector. As more companies adapt to remote work models, it is anticipated that demand for flexible and cost-effective business solutions will continue to rise. With its newly enhanced Business Gold Card, American Express aims to position itself as a leading provider of such solutions.
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