Dow Showdown: American Express vs. Toyota


The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and consumer goods editor/analyst Austin Smith discuss topics across the investing world.

As part of the Motley Fool Madness series, Brendan and Austin go head-to-head analyzing two Dow titans of industry. In today's showdown, American Express collides with Toyota. Many are quick to note that Toyota isn't a Dow component, but for the purpose of designing a full bracket we needed 32 teams. Toyota and Royal Dutch Shell were added to give the tournament an international flair, as well as bring the underrepresented auto sector to prominence. Toyota, once the world's largest automaker by volume, has since ceded its crown to domestic heavyweight General Motors. The company seems to be firing on all cylinders once again, though, and has recovered nicely from the Japan earthquake and tsunami and the Thai floods that sent many automakers into a tailspin. American Express has been a top-performing Dow stock in recent years, and with good reason. The company is a closed-loop credit card model, which allows it to realize more value from a credit card transaction than open-loop competitors. Not only that, but it's cheap on a forward P/E basis.

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At the time thisarticle was published Austin Smith has no positions in the stocks mentioned above. Brendan Byrnes owns shares of Ford. The Motley Fool owns shares of Ford.Motley Fool newsletter services recommendFord and Visa. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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