Companies that increase their dividend payments can make for great long-term investments since owning shares of those businesses means that you'll collect more in dividend income over time. But in many cases, companies may elect to make modest increases that aren't all that meaningful, possibly to keep a streak of dividend increases going.

Two companies, however, that recently announced generous increases of 7% or more include Quest Diagnostics (DGX -0.39%) and American Express (AXP 3.02%). Here's a closer look at where their dividend payments are today and if they're good dividend stocks to buy and hold.

1. Quest Diagnostics

Diagnostics and research company Quest Diagnostics announced on Feb. 2 that it would be raising its quarterly dividend payment by 7.6%. Shareholders will now be collecting $0.71 per share, up from the previous payments of $0.66.

That comes out to an annualized rate of $2.84 and a yield of right around 2%, which is better than the S&P 500 average of 1.6%. Quest has been increasing its dividend every year since 2011.

The big increase may come as a surprise to investors, particularly since it came when Quest released its year-end results for 2022. Last year, net revenue of $9.9 billion declined by 8.4%. The company saw a significant decline (48%) in COVID-19 testing revenue.

Quest's diluted earnings per share (EPS) of $7.97, however, were still far higher than its dividend and would translate to a payout ratio of only 36%. For 2023, Quest anticipates diluted EPS to be between $7.61 and $8.21.

Trading at 18 times earnings, Quest is a relatively cheap stock to own -- the average stock on the S&P trades at 20 times its profits. And with an above-average yield and room for more dividend increases in the future, Quest can make for a promising long-term buy.

2. American Express

On Jan. 27, credit card company American Express said it planned to increase its dividend payments by 15% to $0.60. At $2.40 per share for the year, the dividend yield will now be over 1.3%. While that's a relatively low dividend, it's still well above rivals Visa and Mastercard, which have yields of less than 1%.

News of the increase comes as American Express released encouraging fourth-quarter results. Despite inflation and economic headwinds, the company's revenue (net of interest expense) totaled $14.2 billion and rose 17% year over year.

For the full year, its top line came in at $52.9 billion, which was an even higher year-over-year increase of 25%. And although diluted EPS dipped 2% for the year to $9.85, American Express' payout ratio was just 24% -- even when factoring in this latest dividend hike.

The company expects to build off this momentum and projects that in 2023, revenue will continue to grow at a rate between 15% and 17%. American Express says that in 2022's fourth quarter, cardholder spending was the highest it has ever been.

American Express stock trades at 18 times earnings and can be a solid income investment to buy and hold. Investors can also be comforted by the fact this is a popular Warren Buffett stock in which Berkshire Hathaway has a 20% stake. It's one of Berkshire's top holdings, and it's easy to see why. American Express' business looks solid even as inflation remains a problem for the economy.

If you're a long-term investor, American Express is a stock that may be worth adding to your portfolio right now.