Key Takeaways:
- American Express currently offers a modest 1.3% dividend yield backed by strong earnings and a reliable business model.
- Analysts think the stock has about 17% upside today, which is just about the most upside analysts have seen for the stock in the past year.
- Earnings are expected to grow about 15% annually over the next 3 years, which should fuel dividend growth in the coming years.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
American Express has a long track record of rewarding shareholders with steady dividends and strong buybacks.
Its customer base leans affluent, its brand is trusted, and its business model generates consistent cash flow.
Today, analysts think the stock is undervalued, so it could be a good time to get in on this dividend growth stock.
Analysts Think AXP Has 17% Upside Today
American Express stock is down nearly 20% in the past 3 months because investors are worried about rising credit losses and slower spending growth.
Higher interest rates and cautious consumer behavior have raised concerns about delinquencies, especially in the lending segment.
The market is also rotating out of financials as uncertainty around the economy drags on.
However, it can be beneficial for long-term investors to think about “zigging” when the market “zags”.
American Express is putting up strong earnings growth and appears to be more undervalued today than it has been in the past year:
1: Dividend Yield
AXP’s 1.1% dividend yield might not blow you away, but it’s reliable.
When you compare it to other financial stocks, it’s not the highest, but you’re still investing in a company with long-term staying power.
Find high-yield dividend stocks today that are even better than American Express >>>
2: Dividend Safety
Today, American Express has a dividend payout ratio well below 70%, which is what we like to see for dividend-paying stocks.
American Express keeps its dividend payout well below what it earns, which gives the company room for further growth, and room to breathe when the economy gets bumpy.
The business is expected to see around 15% annual earnings growth over the next 3 years, which will likely continue to fuel dividend growth.
Analyze stocks like American Express quicker with TIKR >>>
3: Dividend Growth Potential
AXP has been slowly but consistently raising its dividend for over 20 years if you exclude when the company maintained dividend payments in 2021.
As the company continues growing earnings, there’s a good chance the company will continue increasing dividends for years to come.
Access up to 5 years of analyst forecasts for American Express on TIKR >>>
TIKR Takeaway
American Express combines reliable dividend payments with long-term growth potential, making it a solid option for investors seeking income without giving up upside.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
