When one of the world’s greatest investors puts nearly $45 billion into a single stock, people pay attention.

Warren Buffett‘s Berkshire Hathawayowns 151.6 million shares of American Express,  a 22.1% stake that makes it the third-largest holding in the entire Berkshire portfolio at 14.7%. Only Apple at 18.5% is a larger bet.

Valued at a market cap of $203 billion, American Express (AXP) stock is also part of the Dow Jones 30 index.

Down 23% from its 52-week high, AXP stock currently offers you a dividend yield of 1.1%.

Is Buffett’s favorite financial stock now trading at a bargain?

What American Express does 

American Express isn’t a typical bank. It runs what’s called a “closed-loop” network, meaning it serves as the card issuer, merchant acquirer, and payment processor all at once.

That’s a very different model than Visa or Mastercard, which rely on banks to issue their cards.

American Express continues to expand its membership base in 2025

Shutterstock-RYO Alexandre Founded in 1850 and headquartered in New York, American Express operates across four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. 

It serves consumers, small businesses, mid-sized companies, and large corporations worldwide.

The real engine of its business model is its premium customer base. These aren’t people who are stretching to pay their bills. 

American Express CFO Christophe Le Caillec recently told attendees at a UBS Financial Services Conference that the company’s delinquency rate has averaged just 1.37% over the past eight quarters. In this period, the delinquency rate also dipped to 1.2%. 

Put simply, Amex customers spend more, pay their bills, and tend to keep their cards.

A growing dividend for AXP stock

According to data from Fiscal.ai, American Express has raised its annual dividend to $3.28 per share in 2026, up from $0.30 per share in 1996. 

Over the last 30 years, its annual dividend has grown at an 8.2% rate, which is exceptional for a company in the cyclical lending sector. 

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Notably, while several large banks were forced to cut or suspend dividends during the Great Financial Crisis, AXP maintained an annual payout of $0.72 per share. 

Key dividend metrics for AXP stock

  • Dividend yield: ~1.1% (at ~$295 share price)
  • Annual dividend per share: ~$3.28
  • 5-year dividend growth rate: ~14% annually
  • Consecutive years of dividends paid: 30+
  • Return on equity: 36%

American Express retains the vast majority of its earnings. That gives it the flexibility to keep growing the dividend, buy back stock, or make an acquisition: all of which it is actively doing.

Buffett is bullish on AXP stock

Berkshire’s AXP stake is valued at $45 billion, which indicates it is not a passive bet but a conviction call. 

  • Card fee revenue has grown at a 17% compound annual growth rate (CAGR) since 2018. 
  • The company just refreshed its Platinum Card, its largest and most premium product. 
  • Within the first few months after launch, Platinum demand was strong enough to shift the entire mix of new card acquisitions toward higher-fee accounts. 
  • The average fee paid per new account jumped noticeably in the fourth quarter of 2025.
  • Travel bookings through the Amex app were up 30% year-over-year in Q4.
  • Spending at Resy restaurants, the dining reservation platform Amex owns, rose 20%. 

And the fundamentals back it up. Those are engagement numbers, not just acquisition numbers. They suggest card members aren’t just signing up; they’re using the product deeply.

Related: Warren Buffett makes a stunning move with his Berkshire stake

International growth is another tailwind. In markets outside the U.S., Gen Z and millennial card member enrollment grew 20% in the fourth quarter. 

Amex currently holds only about 6% market share across major international markets and isn’t yet at coverage parity with the U.S. That’s a long runway.

Is AXP stock undervalued after the pullback?

Analysts tracking the blue-chip dividend stock forecast that adjusted earnings per share will expand from $15.38 in 2025 to $24.30 in 2029.

If AXP stock is priced at 16.4x forward earnings, which is similar to its 10-year average, it should gain 40% within the next three years, after adjusting for dividend reinvestments. 

Given consensus price targets, the Warren Buffett dividend stock trades at a 28% discount to consensus estimates. 

Le Caillec acknowledged the stock’s valuation at the UBS conference but made a simple case:

He expectsearnings per share growth in the 9% to 10% range for the coming year, with an eye on continuing to buy back shares.

AXP is not cheap, but it’s also not priced like a company with a 36% return on equity, mid-teens earnings growth, and near-zero credit losses.

The Platinum refresh tailwind hasn’t fully hit the income statement yet. The company began repricing its existing Platinum cardholder base in January 2026, and that repricing takes 12 months to work through. The full financial impact lands in the fourth quarter of 2026.

For long-term dividend investors, a 23% pullback in a business with this kind of earnings quality, along with Buffett’s $44.8 billion endorsement, is at least worth a very close look.

Related: Delta Air Lines made $8.2 billion from your credit card last year