American Express raises dividend by 17% this year

American Express has announced a significant dividend increase of 17%. This raises its quarterly payout from $0.70 to $0.82 per share. The new dividend will be paid on May 9 to shareholders who are on record by April 4. This is the largest increase in over ten years and the fourth consecutive annual hike. The strong dividend reflects American Express's solid financial performance. In 2024, the company reported record revenue of $65.9 billion, a 9% increase from the previous year. Net income also increased to $10.1 billion, and earnings per share rose by 25% to $14.01. The company saw growth in spending on airlines and premium travel, showing strong business momentum. American Express continues to attract younger customers and maintains low delinquency and credit write-off rates. CEO Stephen Squeri mentioned that card member engagement is high, supporting ongoing profitability. Looking ahead, American Express expects revenue to grow by 8% to 10% in 2025, with earnings per share projected between $15 and $15.50. Moreover, the company invested $5.9 billion in share repurchases in 2024, reducing its total share count by 17% since 2019. This shows management's confidence in their business and suggests they view their stock as undervalued. Despite some risks, including potential downturns in consumer spending and tighter regulations, American Express's strong brand and focus on affluent customers provide a defensive advantage. While the stock is not cheap, its strong dividend increase indicates financial health and long-term confidence, making it an attractive option for investors seeking growth and stability.