The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves discusses topics across the investing world.
American Express is one of Buffett's favorite stocks. It's been on quite a roll in 2012 so far -- it's up 18% for the year, which compares with Dow leader Bank of America, which is up 29%. American Express is one financial with a solid business model, and it has seen its shares rise steadily since the depths of the financial crisis in March 2009. Earlier this year it increased its dividend by 11%, the first increase since November 2007, though AmEx continuously paid a dividend even through the financial meltdown. Its yield is relatively low at 1.5%, which compares with the Dow average of 3%. Going forward, it's possible American Express could increase its dividend. The business should perform quite well going forward, though a rise in delinquencies would certainly hurt.
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John Reeves has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and Wells Fargo and has the following options: short APR 2012 $21.00 puts on Wells Fargo, short APR 2012 $29.00 calls on Wells Fargo, short OCT 2012 $33.00 puts on Wells Fargo, and short OCT 2012 $36.00 calls on Wells Fargo. Motley Fool newsletter services recommend American Express, Visa, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.