American Express (NYSE: AXP) has experienced a decline of approximately 20% since the beginning of 2026, with shares hovering around $300 at present. Investor sentiment has been impacted by broader economic concerns and geopolitical tensions. However, this downturn could present a favorable opportunity for long-term investors. The credit card company’s fundamentals remain strong, with impressive earnings growth and a commitment to rewarding shareholders. American Express closed the year 2025 with robust momentum, reporting a 10% increase in full-year revenue to $72.2 billion and earnings per share of $15.38, up 15% on a non-GAAP basis. Its fourth quarter was particularly noteworthy, with a 10% rise in revenue to $19 billion and a 16% year-over-year increase in earnings per share. The company’s billings reached $445.1 billion, demonstrating resilience in consumer spending. In March, the board announced a 16% hike in its quarterly dividend to $0.95 per share, translating to a 1.3% dividend yield. This increase is supported by strong cash flows, reflected in a payout ratio of less than 25%, allowing for further dividend growth. American Express has also returned $7.6 billion to shareholders, including $2.3 billion in dividends and $5.3 billion on share buybacks, reducing the share count by 2%. With exceptional pricing power and a compelling valuation at approximately $300—trading at about 17 times the projected earnings for 2026—American Express appears to be a strong buy for investors looking for a resilient, premium financial institution. Nevertheless, potential investors should be aware of the risks, including the impact of economic downturns on discretionary spending and lending exposure. As the market adjusts, the recent drop in stock price offers a strategic entry point for those seeking to hold a top-tier stock for the next decade.
