American Express (AXP 1.31%) is a leading credit card company that has continually generated strong financial results in the face of adversity. Catering to an affluent customer base has made it arguably a bit of a safer financial stock to own than others in its industry.
The company has also been generously increasing its dividend over the years. Recently, its Board authorized yet another boost for the payout. This time, the increase will be an incredible 16%. With strong financial results and continued dividend increases, is American Express a no-brainer buy for income investors?
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American Express has more than doubled its dividend in five years
On March 2, American Express announced that its Board of Directors had authorized a 16% increase to its dividend. Its quarterly payout will now be $0.95, up from $0.82 that it has been paying up until now. The rate increases are nothing new for the company. Although it has paused dividend hikes during tumultuous periods, such as in 2020 due to the pandemic and in the Great Recession, it has generally been a good dividend growth stock to own.
Five years ago, the company was paying its shareholders $0.43 every quarter. With this latest increase, that means that American Express' dividend has more than doubled, rising by 121% over that stretch. That averages out to a compounded annual growth rate of more than 17%. That also means that this latest increase is actually at a slower pace than what it has averaged in recent years.
However, even with the increase, the dividend yield is still fairly modest at around 1.3%. That's higher than the S&P 500 average of 1.2%, but for so much dividend growth, income investors may have been expecting a much higher yield.
NYSE: AXP
Key Data Points
Does American Express stock belong in your portfolio?
Over the past five years, American Express stock has doubled in value, providing great returns for its investors in addition to the dividend income it has generated for them. The business has been doing well, with its earnings rising at a good pace in recent years. In 2025, its net income totaled $10.7 billion, which was 45% higher than the $7.4 billion it reported back in 2022.
The stock trades at around 19 times its trailing earnings, which is a decent multiple for a growing business that also pays an above-average dividend. Whether you're looking for a low-risk stock to buy or just want a quality dividend stock to own, American Express can make for an excellent buy right now.
