1 Reason American Express (AXP) Is 1 of the Best Financial Stocks You Can Buy Today

Key Points

• The company isn't the only payment card giant on the scene.

• Its business profile is unique, however, and this gives it quite a competitive edge.

• 10 stocks we like better than American Express ›

American Express (NYSE: AXP) is one of the most recognized and familiar payment card brands not only in its namesake country, but throughout the world. The specialty financial company has a massive customer base and runs a business that is consistently profitable and continually growing.

That's not the foundational reason its stock is a good investment, however. There is one element of the company that makes it unique, and that uniqueness will reward shareholders for years, if not decades, to come.

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American Express has prestige

What distinguishes Amex from other card processors, like Visa or Mastercard, or the countless card issuers, is its exclusivity and cachet.

Image source: Getty Images.

All of the many Amex cards benefit from this elevated status. Cleverly, the company locks this in by offering some of the best perks of any card issuer. Even users of the most accessible Amex products can quickly earn bonuses for travel, merchandise, and other purchases. Note too how the company refers to its cardholders as "members," implying they're part of a select and prestigious group. It's almost as if they've earned some kind of higher rank in the world.

The company's Centurion card, familiarly known as the black card, is an invitation-only product for the highest spenders. Owning it confers not only a wide range of benefits -- 24/7 concierge services, anyone? -- and it grants the holder status and prestige unparalleled in the payment card world.

Powerful growth and robust profitability

With this, people want to own Amex's plastic, and to spend money with these hallowed instruments of commerce. Over the past five years alone, revenue has nearly doubled from just over $38 billion to more than $74 billion. Better, headline net income has tripled and then some over that stretch, from $3.1 billion to a bit north of $10 billion.

Meanwhile, Amex's rewards program continues to be second to none among card issuers. Exclusivity has its benefits for "members," but in this case, it also handsomely remunerates its purveyor.

Should you invest $1,000 in American Express right now?

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American Express is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool has a disclosure policy.