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American Express Rebounding With Credit

The company has been paying shareholders an 80-cent-per-year dividend. At a share price of $59.21 that translates to a meager 1.35% yield. Not enough to motivate most growth-with-income investors. They can afford to raise the dividend since the payout ratio is a very modest 13% of earnings.

When it comes to analysts' expectations for the earnings announcement, the consensus estimates are for earnings per share to come in at $1.09 and revenue to be around $7.93 billion, according to First Call. Other key financial statistics to be listening for involve the percentage of customers with loans 30 days or more past due. That number rose to 1.3% in September, up from 1.2% during the previous month.

American Express' operating margin last quarter looked good at nearly 24% and their profit margin was above 17%. A big number for its future growth and financial stability will be the Total Cash and Operating Cash Flow, which last quarter stood at $22.78 billion and $13.24 billion respectively.

Besides AXP, another company reporting later Wednesday will be e-commerce giant eBay (EBAY). The success and quarterly results from both these companies will give us plenty of hints as to the overall economic health in America and around the world.

At the time of publication, the author held no positions in any of the companies mentioned in this article.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust -- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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