Warren Buffett has owned American Express, a stock that generates millions in annual dividends, for more than three decades, Yahoo Finance reported.
Berkshire Hathaway holds 151.6 million shares of American Express (AXP), according to CNBC. Given the credit giant’s current annual dividend of $3.80 per share, the stake pays Buffett’s conglomerate roughly $576 million a year.
Investors seeking a passive income stream at a low cost should consider owning quality dividend stocks with a growing payout, which increases the yield-at-cost over time.
Vanguard portfolio manager Sharon Hill explains why dividend payers earn a place in long-term portfolios.
“Whether an investor needs income and/or simply values the attributes of higher dividend paying companies, an active fund that seeks high quality companies with stable dividend yields may be suitable.”
American Express is one such quality dividend stock, having raised its annual dividend from $0.60 per share in 2006 to $3.80 per share in 2026.
The lending giant continues to benefit from higher card fees and strong credit quality amid a challenging macro backdrop.
Here’s what’s behind the payout, and what it means for anyone watching AXP stock.
AXP stock is a Warren Buffett favorite
Buffett first bought American Express shares in the early 1990s and has held on through recessions, credit crunches, and a pandemic.
Today the position is one of Berkshire’s largest, and the reason is simple. American Express serves a wealthier, more creditworthy customer base than most card issuers, making it less cyclical than peer lending companies.
In Q2 of 2026, American Express increased revenue by 10% and earnings per share by 11% year over year.
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CEO Steve Squeri said the company delivered “another excellent quarter” and pointed to strong demand for premium products as the driver behind results that beat the company’s own expectations heading into the year.
American Express is investing heavily in technology upgrades and new card acquisitions, which should improve profit margins and drive top-line growth.
It is also expected to close the pending purchase of TheFork, a European restaurant booking platform.
American Express is reinvesting in organic growth and acquisitions, a strategy it credits with driving four straight years of double-digit revenue growth and mid-teens earnings growth.
AXP stock dividend growth has accelerated
American Express raised its quarterly dividend 16% earlier this year, taking it from $0.82 to $0.95 per share, or $3.80 annualized. It followed a 17% hike the year before.
The company held the payout steady through the 2008 financial crisis, while several big banks were forced to cut dividends, which showcases the quality of its premium customers.
Related: History of American Express: Company timeline & facts
CFO Christophe Le Caillec told analysts on the second-quarter call that revenue growth, disciplined expenses, and strong credit performance supported 11% revenue growth and 14% earnings per share growth through the first half of the year, even as the company absorbed the cost of refreshing its Platinum card lineup.
Rising profits, paired with a payout ratio still below a quarter of earnings, give the dividend room to keep growing.
Key AXP dividend ratios to know
Here’s where American Express stands as an income investment right now:
- Annual dividend per share: $3.80
- Quarterly dividend payment: $0.95 per share
- Dividend yield: Approximately 1.13%
- Payout ratio: Roughly 21% to 22% of earnings
- 20-year dividend growth rate: More than 9.5% annually
- Most recent dividend increase: 16%
Most of its earnings stay in the business or fund share buybacks, which leaves plenty of cushion for future increases, even if spending growth slows.
What Wall Street analysts think of AXP stock
Wall Street remains largely upbeat on American Express, even after a strong run in the stock price.
Deutsche Bank recently initiated a Buy rating on the stock, according to the Globe and Mail, while UBS carries a price target near $384, MT Newswires noted.
Morgan Stanley has kept an “Equal-Weight” rating in place, too, MarketBeat confirmed, alongside a price target above $380, arguing that the company’s premium customer base and card fee growth justify a higher valuation.
Not every analyst is as convinced the stock has more room to run at current levels, and a handful maintain Hold ratings, pointing to a valuation that already reflects much of the good news.
Out of the 22 analysts covering AXP stock, 11 recommend “Buy,” 10 recommend “Hold,” and one recommends “Sell.”
The average American Express stock price target is $380, which indicates an upside potential of 13%.
Squeri, addressing why the company chose to reinvest rather than raise earnings guidance further, put the philosophy plainly. The company can either “drop the overperformance to the bottom line” or invest in growth opportunities across the business, and it has chosen the latter because that approach builds more shareholder value over time.
For income-focused investors, American Express offers a dividend that isn’t the highest yielding on the market, but one that has grown quickly, remains well covered by earnings, and comes attached to a business Buffett has trusted with billions of dollars for more than 30 years.
Related: Iconic bank stock pays Buffett’s Berkshire $619M in annual dividends
