Is American Express Company (AXP) a Reliable Income Stock for Long-Term Investors?
American Express Company (NYSE:AXP) is included among the 11 Best Income Stocks to Buy According to Hedge Funds.
A close-up view of a payment terminal, capturing the sophistication of a payment network.
American Express Company (NYSE:AXP) sets itself apart from other credit card companies by focusing on a wealthier customer base, offering premium gold and platinum cards, and serving a large number of corporate clients. Customers often benefit from generous travel rewards, making the brand particularly appealing to frequent travelers.
Unlike Visa or Mastercard, American Express Company (NYSE:AXP) not only issues cards but also runs its own payment network, allowing it to lend directly and earn interest income. Its dividend track record adds to its appeal, with a modest 1.1% yield supported by a low 21% payout ratio. The company has grown its dividend at an annual rate of 12% over the past five years and maintains a strong balance sheet, leaving plenty of room for future increases and long-term compounding.
American Express Company (NYSE:AXP) currently offers a quarterly dividend of $0.82 per share and has a dividend yield of 1.1%, as of July 31. It is among the best dividend stocks to invest in.
While we acknowledge the potential of AXP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.
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