American Express: A Premium, If Slightly Anxious, Investment

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It’s funny, isn’t it? The way we get attached to these little rectangles representing ownership in… well, in everything. I was staring at the American Express (AXP +0.62%) chart the other day, and it struck me as profoundly silly. A line going up and down, dictating, on some level, the availability of slightly nicer olive oil. The stock had taken a bit of a tumble recently, from a high of over $387 to around $300. It’s enough to make you question your life choices, really. And, more importantly, to wonder if you should be buying more.

The broader financial sector seems to be having a bit of a moment, a collective sigh of unease. Everyone’s bracing for something, though no one quite knows what. It’s like waiting for a delayed flight – you just know it’s going to be unpleasant, but you’re trapped in the departure lounge anyway. But with American Express, I started to wonder if the pessimism had gone a bit too far. Was this a genuine dip, or just the market having a particularly judgmental day?

I’ve been digging into the numbers, of course. That’s what I do. It’s less glamorous than it sounds. Mostly it involves staring at spreadsheets until my eyes cross. But what I’ve found is… well, it’s actually pretty solid. The company seems to be doing things right. They’re not just surviving; they’re quietly thriving. And that, in this climate, feels almost… subversive.

A Buyback and Earnings That Don’t Require a Loan

The momentum is impressive, I’ll give them that. It’s not the kind of explosive growth that makes headlines, more of a steady, relentless climb. They’re projecting earnings per share between $17.30 and $17.90 for 2026. Midpoint is around $17.60, which is a pretty tidy 14% year-over-year increase. It’s the kind of growth that doesn’t require you to take out a second mortgage. They built on 15% EPS growth in 2025 (adjusted for a subsidiary sale, naturally – there’s always a ‘naturally’ with these things).

Revenue was a healthy $72.2 billion in 2025, up 10% year-over-year. They’re not just shuffling money around; they’re actually making more of it. And, crucially, they’re returning it to shareholders. $7.6 billion in 2025, split between dividends ($2.3 billion) and share repurchases ($5.3 billion). It’s like they’re actively trying to make me feel less guilty about my investment.

And they increased the quarterly dividend by 16% to $0.95 per share. A 1.3% dividend yield. It’s not going to fund my early retirement, but it’s a start. It’s a little acknowledgement that, yes, I did make a reasonably sensible decision.

The Platinum Card and the Price of Avocado Toast

What’s fascinating is how they’re doing it. It all comes down to their focus on high-spending consumers. It’s a strategy that feels both obvious and slightly unsettling. They’re catering to the people who can afford to spend money, even when they probably shouldn’t. They recently revamped the Platinum Card, raising the annual fee from $695 to a rather audacious $895.

My aunt Mildred nearly had a stroke when she heard about it. “$895? For a credit card? What are they, made of gold?” But apparently, people are paying it. They’re layering on perks – dining credits, Lululemon allowances (seriously?), luxury hotel benefits, even credits toward an Oura Ring (I have no idea what that is, and I’m not sure I want to know). It’s a carefully constructed ecosystem of indulgence.

They refreshed cards in nearly a dozen countries last year. It’s not just about attracting new customers; it’s about keeping the existing ones hooked. Net card fees hit $10 billion in 2025, up 18% year-over-year. They’re monetizing aspiration, and it’s working.

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Valuation and a Plea for Sanity

So, is the stock a good buy? At around $300, it’s trading at about 17 times management’s projected 2026 earnings. It’s not cheap, but it’s not outrageously expensive either. There are risks, of course. A slowdown in luxury travel, a shift in regulations… the usual anxieties. But given the company’s growth profile, the dividend hike, and the share buyback program, I think the valuation is justified.

I’m not suggesting you mortgage your house. But if you’re looking for a reasonably solid investment, with a company that seems to be doing things right, American Express is worth a look. And if nothing else, it might provide a small measure of comfort in these increasingly uncertain times. It’s a little rectangle of ownership, and sometimes, that’s enough.

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2026-03-18 06:02