While the prophets of doom continue to worry about how long our thriving economy can last, top-performing companies continue to belt out exciting new products and reap gains. Financial services are an important element of a healthy economy, and American Express (NYSE:AXP) is a company that's still bringing out innovative products to engage with its customers.

Despite strong competition from the likes of juggernauts Visa and Mastercard, American Express is holding on to its niche customer base and expanding its unique business model.

American Express gold card on a table with a Boxed delivery.

Image source: American Express.

A great fourth quarter

American Express released its fourth-quarter earnings on Friday, and they showed continued high revenue and growth. Fourth-quarter revenue came in at $11.4 billion, an increase of 9% year over year. Full-year revenue was up 8%, and earnings per share were $7.99, up from $7.91 in 2018. This marked the tenth straight quarter of close to or at double-digit growth.

2019 saw 11.5 million new cards issued, with 70% of new card members opting for fee-based products. The company has released or refreshed more than 50 cards in the consumer and commercial spaces over the past two years.

Fees, spend, and lend

The company makes its revenue from a mix of products it calls "fees, spend, and lend," which encompasses its fee-based products, consumer spending, and loans. In the fourth quarter conference call, CEO Stephen Squeri spelled out how the company is delivering on a four-pronged strategic approach that he outlined when he took the helm two years ago.

These were his four strategic imperatives, and how the company accomplished each one this past year:

  1. Strengthening leadership in the premium consumer space. American Express continually refreshes its "premium charge products," and it keeps upgrading global co-brand portfolios, which include partnerships with companies that offer special packages for American Express customers. It has agreements with premium retailers, such as Saks Fifth Avenue and Apple, that are in line with its premium subscription base. 

  2. Extending leadership in the commercial payments space. American Express has a strong focus on small and medium-sized businesses and offers various products to fit their needs, which it also continually refreshes. It also services this client base with AP automation solutions and loan and repayment programs, which it offers as a non-bank financial services organization and allow small businesses to have all of these needs taken care of under one roof. It also offers premium services for business travelers such as airport club lounge access and real-time foreign currency exchange. 

  3. Expanding digital partnerships and targeted acquisitions. American Express has invested in its mobile platform with several acquisitions so cardmembers can have easy access to the company's special rewards platforms, including travel and dining options and other lifestyle services, as well as easily manage their money and business needs. Some of the company's recent acquisitions were Resy, which makes it easy to book a table at a restaurant digitally, and Cake, which simplifies paying a restaurant bill and adds value to the customer with payment options. 

  4. Leveraging its integrated model toward becoming the most innovative network. Part of this goal was to be accepted by a full network of merchants by the end of 2019, and the company has nearly achieved that with 99% of U.S. merchants who take credit cards now accepting the American Express card. It's rare to hear "We don't take Amex" these days. It also recently worked out a deal with the People's Bank of China to expand its network there.

Long-term growth

One of the company's advantages is its extensive range of revenue-building devices, composed of cards fees, loans, billings, interest, and more, which gives it great insulation against mishaps in any one of its divisions. When everything works together, such as the current state, it's even stronger.

Not only has American Express been able to please its core premium customers, it's also attracting millennials, a younger and more digitally occupied clientele. About 81% of American Express' customers engage with digital payments, and the company saw a 26% increase year over year in the number of customers who engage daily with the mobile app.

The company expects continued growth in the range of 8% to 10%. Squeri said "Our consistent performance, along with our continued investments in product innovation and growth opportunities, gives us confidence that we have a long runway for steady growth over the long term."

So should you buy?

The main challenge for American Express would be if the portended recession actually comes and consumer spending -- especially premium, the company's mainstay -- slows down. So far, challenges from new financial technology companies have been unfounded, but the company has to keep up with its digital innovations to stay level, which has increased its expenses.

That said, American Express has reason to believe it can sustain its growth in the near future, and its share price trades at a fairly modest 16.9 times earnings, which makes it a good buy. It also pays a consistent dividend that currently stands at 1.27%. I won't be selling my shares anytime soon.