Better Buy: American Express vs. Visa

Many investors probably think of American Express Company (NYSE: AXP) and Visa Inc (NYSE: V) as being nearly identical businesses. After all, both companies are listed on the Dow Jones Industrial Average and most consumers might only think of either company when they pull out their respective cards from their wallets or look to redeem their credit card reward points. Both companies have also comfortably beaten the market over the past year as investments.

The truth is, however, that there are significant differences in the two companies' business models; differences that, in recent years, have played a significant role in the valuation the market is willing to support for both companies. Of course, growth rates, valuations, and a look at the opportunities and risks facing each company are also important things to consider before buying stock in a company. So, without further ado, let's take a closer look at both companies to see which is more deserving of an investment at this time.

Source: Fool.com