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American Express Boosts Dividend by 16% Amid Strong Earnings Growth

Apr 03, 2026 01:56 UTC
AXP
Long term

American Express has increased its quarterly dividend by 16%, reflecting robust earnings growth and a commitment to shareholder returns. The stock's recent pullback offers a potential buying opportunity for long-term investors.

  • American Express increased its quarterly dividend by 16% to $0.95 per share.
  • 2025 full-year revenue rose 10% to $72.2 billion, with earnings per share up 15% to $15.38.
  • Fourth-quarter revenue and earnings per share grew 10% and 16% respectively, with billed business up 9% to $445.1 billion.
  • The dividend yield is now 1.3%, supported by a payout ratio of less than 25%.
  • Share repurchases reduced the share count by 2% in 2025, returning $7.6 billion to shareholders.
  • Younger demographics, particularly Millennials and Gen Z, drive growth through premium product engagement.

American Express (NYSE: AXP) has announced a 16% increase in its quarterly dividend, raising the payout to $0.95 per share. This move follows the company's strong financial performance in 2025, where full-year revenue rose 10% to $72.2 billion, and earnings per share hit $15.38, a 15% increase on an adjusted basis. The fourth quarter was particularly notable, with revenue climbing 10% to $19.0 billion and earnings per share surging 16% year over year. The company's billed business grew 9% to $445.1 billion, underscoring resilient consumer spending. The dividend increase, which brings the stock's yield to 1.3%, is supported by a low payout ratio of less than 25% based on 2025 adjusted earnings. This provides ample room for future dividend hikes even if earnings growth slows. American Express also returned $7.6 billion to shareholders in 2025, with $5.3 billion allocated to share repurchases, reducing the share count by 2%. The company's ability to refresh premium products, such as the recent $895 annual fee increase for its Platinum Card, has driven engagement among younger demographics, including Millennials and Gen Z. These groups now account for the majority of new customer acquisitions, offering a long-term growth runway. However, risks remain, including potential economic downturns that could impact discretionary spending and lending exposure. Despite a 20% decline in share price since the start of 2026, the stock's valuation appears attractive to long-term investors.

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