Core Viewpoint - Focusing solely on high dividend yields can lead to overlooking strong investment opportunities with lower yields but significant dividend growth potential [1] Group 1: Eli Lilly - Eli Lilly's sales increased from $28.5 billion in 2022 to over $45 billion in the past year [4] - The company offers a low yield of 0.8%, attributed to a stock price increase of over 370% in five years [5] - Eli Lilly has raised its dividend by an average of 15% annually for seven years, with a current quarterly dividend of $1.50, up from $0.74 in 2020 [6][7] Group 2: TJX Companies - TJX Companies provides a dividend yield of 1.4%, slightly above the S&P 500 average of 1.2% [8] - The company's revenue for the first quarter of fiscal 2026 rose by 5% year-over-year, totaling $13.1 billion [9] - TJX has increased its dividend by 13% this year, marking the 28th increase in 29 years, with an average annual increase of 20% [10][11] Group 3: American Express - American Express has a modest dividend yield of 1%, with revenue net of interest expense reaching nearly $17 billion, a 7% year-over-year increase [12] - The company raised its quarterly dividend by 17% in March, with the current dividend at $0.82, which is 91% higher than the $0.43 paid five years ago, reflecting a compounded annual growth rate of 13.8% [13][14]

Credit Card Industry Trends - JP Morgan disrupted the credit card industry a decade ago with Sapphire Reserve [1] - JP Morgan is pushing further upstream with a new credit card [2] - Competitor cards like Capital One carry a $395 fee [7] New Credit Card Details - The new credit card has a $795 annual fee, 45% higher than before [2] - The company hopes to attract customers with about $2,700 in annual benefits [2] - Benefits include fine dining and resort stays, Apple TV and Apple Music subscriptions [3] - Credits may only be applicable at selected restaurants or resorts [4][6][7] - A $500 hotel credit requires a two-night stay at a hotel within their fine resorts network [6] - A $300 dining credit is only valid at restaurants selected by JP Morgan Chase [7] Potential Risks and Customer Behavior - Customers may downgrade to lower-fee cards or switch to competitors [7] - Customers are sophisticated and may maximize credit card benefits using spreadsheets [5] - The bank previously incurred a $300 million charge due to customers gaming the system [4]

American Express (AXP) 2025 Conference June 11, 2025 09:45 AM ET Speaker0 Alright. Up next, we have American Express. Before we get started, I'm going to read some quick disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm getting really good at saying tha ...

Group 1: American Express - American Express has become Berkshire Hathaway's second-biggest holding, with 151.6 million shares valued at $44.5 billion, making up 16% of Berkshire's stock portfolio [2][6] - The company focuses on a higher-income demographic, which is less affected by macroeconomic challenges, evidenced by a 6% year-over-year growth in total billed business and an 8% increase in currency-adjusted revenue [5][6] - American Express maintains its full-year profit outlook, expecting revenue growth of 8% to 10% and earnings per share between $15 and $15.50, reflecting a 14% increase from last year's earnings of $13.35 per share [6] Group 2: Capital One Financial - Capital One Financial caters to a broader consumer base, including those looking to build or rebuild credit, and has recently completed an acquisition of Discover, enhancing its market position [7][12] - The merger with Discover could challenge the dominance of Mastercard and Visa in the credit card payments network market [8][10] - Berkshire Hathaway established a 7.1 million share stake in Capital One worth about $1.3 billion, and Goldman Sachs has added it to its list of undervalued stocks [12] Group 3: Occidental Petroleum - Occidental Petroleum remains a significant investment for Berkshire Hathaway, with a 264.9 million share position valued at approximately $13 billion, representing nearly 6% of Berkshire's stock portfolio [18] - Despite the shift towards renewable energy, oil demand is projected to continue growing, with estimates suggesting peak oil consumption may not occur until 2034 or later [14][15] - Occidental is advancing in carbon-capture technology, which is expected to grow at an annualized rate of over 21% through 2034, positioning the company well for future opportunities [16]

The burden of credit card debt is high for many Americans. In the first quarter of 2023, credit card balances nationwide surpassed $1 trillion for the first time and have remained above that amount since — the most recent Federal Reserve data puts outstanding balances at a total amount of $1.18 trillion. On an individual scale, balances are high too. TransUnion data shows the average credit card debt per borrower is $6,580, while Experian data puts average balances at $6,730. With today’s very high credi ...

Core Points - The American Express Business Platinum Card offers a limited-time promotion of 150,000 Membership Rewards points and a $500 statement credit, contingent on meeting specific spending requirements [2][4][10] - The offer is valid until June 30, 2025, and requires spending $20,000 on eligible purchases within the first three months to earn the points, along with an additional $2,500 on qualifying flights to receive the statement credit [2][10] - The total value of the offer can exceed $2,000, especially when transferring points to travel partners, which can yield significantly higher redemption values [3][7][6] Offer Breakdown - The offer consists of two tiers: earning 150,000 points and a $500 statement credit, which can be maximized by incorporating flight bookings into the spending requirement [4][5] - If only the points are earned, the offer retains value, but the statement credit alone diminishes its overall worth [5][6] - The value of 150,000 points can vary widely based on redemption options, with potential values reaching over $2,600 for premium flight bookings [6][12][15] Redemption Options - Transferring points to travel partners can yield substantial value, with examples showing that 150,000 points can be worth over $1,500 when used for premium flights [7][12][15] - Specific examples include booking a business class flight to Frankfurt for 81,000 miles, valued at over $2,600, and a flight to Paris for 60,000 miles, worth over $3,000 [12][15] - Economy flights can also provide significant value, allowing for multiple bookings with the available points [18] Annual Fee Consideration - The American Express Business Platinum Card has a $695 annual fee, necessitating that cardholders derive sufficient value from the card's benefits to justify the cost [20] - Benefits such as airport lounge access, statement credits for Hilton and airline fees, and potential rewards from business spending can help offset the annual fee [20][23]

Group 1: Joint Venture and Operations - BlackRock Inc. and Jio Financial have received approval from the Securities and Exchange Board of India to start their mutual fund operations through the joint venture named Jio BlackRock Asset Management [1] - The joint venture plans to launch a variety of investment products with a "digital first" approach targeting both retail and institutional investors [1][2] - The initial investment for the joint venture is set at $150 million from each partner, aiming to democratize access to investment solutions in India [4] Group 2: Strategic Rationale and Market Opportunity - This initiative aligns with BlackRock's growth strategy to enhance its market share in both domestic and global markets, capitalizing on India's rising affluence and digital transformation [5] - The joint venture aims to reshape the investment landscape in India by providing affordable, tech-enabled options for millions of investors [4][5] Group 3: Historical Context and Future Plans - BlackRock and Jio Financial formed the joint venture in July 2023, combining BlackRock's investment expertise with Jio's local market knowledge [3] - In April 2024, both entities expanded their collaboration to establish a wealth management and broking business in India, targeting the growing retail investor base [4]

Economic Context - The United States has adopted an America-first strategy, leading to a significant GDP per capita difference, with the U.S. at over $80,000 compared to the European Union's average of just over $40,000 [1] - Reinvestment into America, particularly in technology and infrastructure, is expected to further widen this GDP gap [2] American Express - American Express (AXP) is a leading credit card issuer in the U.S., with Warren Buffett holding over 21% of the company [4] - The company operates its own payments network, generating over half of its revenue from transaction fees, unlike competitors that rely on Visa or Mastercard [5] - Vertical integration allows American Express to offer numerous benefits to cardholders, driving consumer spending and benefiting its merchant partners [6] - The business model provides inflation protection, allowing the company to maintain revenue through transaction fees even as prices rise [7] - American Express is positioned to issue more loans to wealthier customers, maintaining low loss rates, and is trading at a reasonable P/E ratio of 21 [8] Amazon - Amazon (AMZN) has invested a cumulative $355.7 billion in capital expenditures from 2015 to 2024, primarily in the U.S., significantly raising wages for lower-end workers [10] - The company plans to spend over $100 billion on capital expenditures in 2025, particularly benefiting from AI infrastructure growth through its Amazon Web Services (AWS) division [11] - Amazon's revenue model is resilient to tariff impacts, as it earns from merchant sales, advertising, and Prime subscriptions regardless of seller origin [12] - Over the next decade, Amazon has the potential to invest hundreds of billions more into U.S. infrastructure, driving revenue and earnings growth, with a P/E ratio of 33, close to an all-time low [13]

Core Viewpoint - The completion of Capital One's $35 billion acquisition of Discover Financial Services significantly alters the credit card industry landscape, creating a major player in terms of loan volume [1]. Group 1: Acquisition Details - The acquisition allows Capital One to capture a larger share of card spending and compete more effectively with Visa and Mastercard [2]. - Discover's payments network, now under Capital One's control, is one of only four in the U.S., enabling increased revenue from interchange fees and reducing reliance on Visa and Mastercard [2]. - The merger faced regulatory scrutiny but received final approval from the Federal Reserve and the Office of the Comptroller of the Currency, with no challenge from the U.S. Department of Justice [3]. Group 2: Conditions and Synergies - The approval came with conditions requiring Capital One to address enforcement issues related to Discover's past overcharging of merchants [4]. - The merger is expected to generate $1.5 billion in expense synergies and $1.2 billion in network synergies by 2027, leading to over 15% accretion to adjusted non-GAAP EPS by that year [6]. - The combined entity will have a pro forma CET1 ratio of approximately 14% at closing, strengthening Capital One's balance sheet [7]. Group 3: Customer Impact and Future Strategy - There will be no immediate changes to customer accounts or banking relationships, with customers receiving comprehensive information ahead of any changes [8]. - Capital One plans to continue offering Discover-branded credit card products alongside its existing consumer cards [8]. - The merger enhances Capital One's "Digital First" banking model, leveraging Discover's national direct savings bank to improve competitiveness against larger banks [9]. Group 4: Strategic Growth - Capital One has a history of strategic acquisitions aimed at diversifying its offerings and expanding market presence, transforming from a monoline credit card issuer to a diversified financial services firm [10]. - Over the past year, Capital One's shares have increased by 40.3%, outperforming the industry growth of 39% [11].

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - Household sector over-indebtedness is a critical issue in Thailand, with the household debt-to-GDP ratio reaching 95.5 percent in 2021Q1 and remaining around 90 percent thereafter, indicating significant risks to financial stability and economic growth [10][11] - The report presents a comprehensive, multi-pronged approach to household deleveraging in Thailand, drawing on international case studies from Brazil, Hungary, Korea, and Malaysia to inform policy recommendations [4][53] Summary by Sections A. Introduction - The household debt in Thailand has been historically high, peaking at 85.9 percent of GDP in 2015 and increasing to 95.5 percent during the pandemic, with a significant share of unsecured loans [10][11] B. Thailand - The Thai government has implemented various measures to support household debt deleveraging, including broad-based assistance during the pandemic and debt restructuring programs [19][21] - As of 2024Q3, non-performing loan (NPL) ratios increased to 3.28 percent, with credit card loans having the highest NPL ratio at 4.61 percent [17][18] C. Brazil - Brazil's household debt surged during the pandemic, with the Debt Service-To-Income (DSTI) ratio peaking at 28 percent in March 2023, and over 40 percent of consumers defaulting on some form of debt [24][25] - The "Desenrola Brasil" program helped over 15 million people renegotiate R$52 billion in overdue debt, reducing the household DSTI ratio to 26.0 percent by June 2024 [28] D. Malaysia - Malaysia's household debt-to-GDP ratio increased from 66 percent in 2008 to 89 percent in 2015, prompting the central bank to implement measures to curb excessive indebtedness [29][30] - The introduction of tiered pricing on credit card interest rates and stricter credit card requirements helped moderate the growth of household debt [32][34] E. Korea - Korea experienced a credit card boom post-Asian financial crisis, leading to a peak in household debt at 62.5 percent of GDP by 2002, followed by significant policy measures to address the crisis [35][38] - The credit card delinquency ratio dropped to 2.6 percent in 2006 from above 10 percent in 2002-2003 due to effective debt restructuring programs [39] F. Hungary - Hungary's household debt peaked at 39.4 percent of GDP in 2010, with significant risks arising from foreign currency loans, leading to extensive state intervention in the banking sector [40][41] - The conversion of foreign currency loans into local currency and the introduction of debt cap regulations helped stabilize the financial situation [43][44] G. Other International Practices - Various international practices for debt rehabilitation and forgiveness are discussed, including the Individual Voluntary Arrangements in Hong Kong and the Personal Insolvency Act in Ireland [46][47] H. Conclusions and Policy Recommendations - A comprehensive approach to household deleveraging is necessary, combining ex-post measures to address existing debt and ex-ante policies to prevent new debt accumulation [53][54] - Emphasis on financial literacy, responsible lending practices, and regulatory measures is crucial to mitigate over-indebtedness risks [57][58]