Costco to Stop Accepting American Express: What It Means for Mutual Fund Investors (AXP)

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Costco to Stop Accepting American Express: What It Means for Mutual Fund Investors (AXP)

American Express logo
Shares of American Express (AXP) plunged on Thursday after reports that Costco will no longer be accepting the card in its stores. Here’s what the news means for mutual fund investors.

Inside the News

Starting in March 2016, Costco will stop accepting American Express cards in its stores after a 16-year deal. Currently, the retailer has an exclusive deal with American Express, as it is the only credit card accepts at its stores.

Shares of American Express plunged on Thursday as management reported that the terminated deal would cut into profits. The deal with Costco accounts for about 20% of its worldwide loans and 10% of its cards in force.

Little Support for Shares

On Friday morning, Wall Street analysts began downgrading the credit card company, as a decent portion of its profits will disappear in 2016. The stock is trading around 52-week lows and has a dividend yield just over 1%. With its declining share price and low dividend yield, it is tough to make an argument for investors to step in.

Mutual Funds to Watch

Investors interested in AXP may be interested in the funds listed below. These funds currently have the largest stakes in the company.

The Bottom Line

The funds listed above allow investors to gain exposure to AXP while remaining diversified. Investors interested in AXP may also be interested in Visa (V) or Mastercard (MA).

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American Express logo

Costco to Stop Accepting American Express: What It Means for Mutual Fund Investors (AXP)

Shares of American Express (AXP) plunged on Thursday after reports that Costco will no longer be accepting the card in its stores. Here’s what the news means for mutual fund investors.

Inside the News

Starting in March 2016, Costco will stop accepting American Express cards in its stores after a 16-year deal. Currently, the retailer has an exclusive deal with American Express, as it is the only credit card accepts at its stores.

Shares of American Express plunged on Thursday as management reported that the terminated deal would cut into profits. The deal with Costco accounts for about 20% of its worldwide loans and 10% of its cards in force.

Little Support for Shares

On Friday morning, Wall Street analysts began downgrading the credit card company, as a decent portion of its profits will disappear in 2016. The stock is trading around 52-week lows and has a dividend yield just over 1%. With its declining share price and low dividend yield, it is tough to make an argument for investors to step in.

Mutual Funds to Watch

Investors interested in AXP may be interested in the funds listed below. These funds currently have the largest stakes in the company.

The Bottom Line

The funds listed above allow investors to gain exposure to AXP while remaining diversified. Investors interested in AXP may also be interested in Visa (V) or Mastercard (MA).

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next