Warren Buffett owns American Categorical as one in every of Berkshire Hathaway’s largest positions, and he is held it for many years.
In actual fact, the Oracle of Omahaearns over $575 million in annual dividends from American Categorical (AXP) inventory.
With Q1 2026 earnings due April 23, buyers are watching the financial institution inventory carefully. The query on everybody’s thoughts: Will current modifications to its in style Platinum Card assist AXP beat Wall Road’s estimates, permitting administration to as soon as once more improve its dividend payout?
AXP dividend key ratios at a look
Dividends matter extra to buyers than folks usually understand, one thing that is not misplaced on Buffett, whose Berkshire Hathaway owns 22% of American Categorical inventory, making him the only largest shareholder by far.
Vanguard’s portfolio supervisorSharon Hill put it plainly:
“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 Categorical has grow to be precisely that sort of firm over the previous a number of years.
For income-focused buyers, this is the place American Categorical stands as a dividend inventory proper now:
- Annual dividend per share: $3.80 (ahead) / $3.28 (trailing)
- Quarterly dividend: $0.95 per share (efficient 2026, a 16% improve)
- Dividend yield: roughly 1.2%
- Annual dividend expense (NTM): $2.60 billion
- Free money stream (2026E): $11.87 billion
- Payout ratio: roughly 22%
- 5-year dividend progress fee: ~17% yearly
- Dividend frequency: quarterly
The yield is modest, however the progress fee is outstanding. A 17% annual dividend progress fee, compounded over 5 years, is uncommon in monetary companies, a cyclical sector.
Extra on dividend shares:
- Costco quietly bumps its quarterly dividend by 13%
- How a lot to put money into Greatest Purchase inventory for $1,000 in 2026 dividends
- Early SCHD ETF buyers now earn a 12.5% dividend yield on value
And with a payout ratio round 22%, there’s loads of room for continued will increase.
Within the This fall earnings name, CEO Stephen Squeri mentioned the corporate plans to develop its dividend consistent with EPS, concentrating on a 20%–25% payout ratio. Notably, the dividend has elevated from $1.72 per share in 2021.
AXP’s premium technique boosts dividend payout
Based in 1850 and headquartered in New York, American Categorical operates a closed-loop funds community, serving as each the cardboard issuer and the service provider acquirer.
That offers it an edge most rivals cannot replicate.
The enterprise is cut up into 4 segments: U.S. Client Companies, Industrial Companies, Worldwide Card Companies, and International Service provider and Community Companies.
In 2025:
- AXP reported document income of $72 billion, up 15% yr over yr.
- Earnings per sharestood at $15.38, up 15% YoY.
- Card incomesurpassed $10 billion for the primary time, up 18% YoY.
Chief Monetary Officer Christophe Le Caillec described the credit score image bluntly on the This fall 2025 earnings name:
“The delinquency rate of American Express over the last two years, eight quarters, was like 1.37% of the eight quarters. And the eighth quarter, when it was not 1.3%, it was 1.2%.”
That sort of stability is the results of a deliberate push towards premium card members—individuals who spend extra, willingly pay charges, and infrequently default.
A widening base of premium members permits the monetary companies big to generate regular money flows throughout market cycles and to proceed paying dividends to shareholders.
What analysts anticipate from AXP inventory in Q1?
Wall Road analysts predict AXP will put up quarterly earnings of $3.99 per share for Q1, reflecting a 9.6% improve from the identical interval final yr. Income is forecast at $18.61 billion, representing a 9.7% year-over-year improve.
Within the 5 quarters main as much as This fall, AXP beat income estimates each single time. It missed barely on EPS in This fall, with earnings of $3.53 per share versus an estimate of $3.55 per share.
That is a really skinny miss, and, notably, the inventory barely moved on earnings day, up 0.19%.
Jim Cramer expects AXP to learn from its premium buyer base
Noam Galai/ Getty Photographs
CNBC’s Jim Cramer supplied a telling commentary forward of this earnings cycle:
“American Express almost always seems to retreat when we see the numbers and then runs a couple of days later.”
He additionally highlighted AXP’s rich buyer base as a sturdy edge, noting that demand for premium merchandise can keep sturdy even when the broader economic system slows.
Analyst consensus for AXP inventory at present leans towards “Moderate Buy”, with a imply worth goal of $352.60, representing roughly 6.9% potential upside from current ranges.
The large Q1 catalyst would be the Platinum Card refresh. American Categorical launched the brand new U.S. Client and Small Enterprise Platinum Playing cards in mid-September 2025 and new candidates moved to the upper worth level instantly.
The present cardholder base, the “back book”, started repricing in January 2026. For the reason that annual payment is amortized over 12 months, the complete monetary impression builds all year long, peaking in This fall when the whole portfolio will probably be on the brand new payment.
Associated: American Categorical is about to retire this controversial card profit, switch companion
Journey bookings by the Amex app had been up 30% in This fall, whereas spending at Resy eating places by U.S. customers rose 20%. Platinum Card retention charges after the payment improve for the buyer card stood at a strong 99%.
What subsequent for the Warren Buffett inventory?
Wells Fargo set the very best present worth goal for AXP at $415, which was issued on April 9, 2026. That is significant backing from a significant financial institution simply forward of earnings.
The mix of Platinum Card momentum, a resilient premium client base, mid-teens EPS progress steerage of $17.30–$17.90 for 2026, and a quickly rising dividend makes a compelling case.
AXP is not the highest-yielding dividend inventory in the marketplace. However for buyers who care about dividend progress, credit score high quality, and a enterprise mannequin constructed to endure, it is arduous to argue with Buffett’s logic.
Q1 earnings on April 23 will give the market its first actual take a look at how the Platinum refresh is translating into income.
Given the beat historical past and the tailwinds in play, the percentages look favorable.
Associated: Down 23%, is that this Warren Buffett dividend inventory undervalued?
