Baystreet.ca
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American Express (NYSE:AXP) is one of the world’s top credit card companies, and it has been performing well in recent years amid varying economic conditions. And due to its strong performance, it has been able to continually bump up its payout.
Earlier this month, it announced a $0.12 per share increase to its quarterly dividend, bringing the payout to $0.82 per share. That represents a significant 17% increase to its payout, and the stock now yields 1.2%, which is in line with the S&P 500 average of 1.3%.
The dividend hike follows a strong 2024, where American Express reported nearly $10 billion in profit, up from $8.3 billion a year earlier. The company continues to benefit from strong spending patterns among its affluent customer base, who remain relatively insulated from economic pressures.
The stock has been a solid buy over the past 12 months, rising by around 20%. It has recently dipped in value, with its 20-day moving average falling below its 50-day moving average. But with a solid value proposition, trading at 20 times its trailing earnings, it can be a solid investment to load up on today.
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The company’s ability to thrive in challenging environments is a key advantage, as its cardholders typically maintain high spending levels even during economic slowdowns. This resilience helps support both earnings and dividend sustainability.
American Express is a top stock in Warren Buffett’s portfolio and it can also be a great one for many investors, for the long-term stability and dividend income it can provide. It’s a solid stock to just buy and hold for years.
