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3 Reasons American Express Is a Long-Term Buy for 2030 and Beyond
AXPAmerican Express(AXP) The Motley Fool·2025-03-26 22:56

Core Viewpoint - American Express is a strong investment opportunity due to its resilient consumer base, fee-based model, and growing dividend, making it suitable for long-term holding. Group 1: Resilient Consumer Base - American Express targets affluent consumers, providing stability and healthy growth despite inflation, with a 10% year-over-year revenue increase and a 25% rise in earnings per share to 14.01in2024[3][4]−Thecompanyissuccessfullyreachingyoungerconsumers,withmillennialsandGenZdrivinggrowthinfee−basedpremiumcards,whicharethefastest−growingsegmentintheindustry[5][6]Group2:Fee−BasedModel−Thefee−basedstructureofAmericanExpresscreatesloyaltyandarecurringrevenuestream,withcardfeesgrowingat1614.01 in 2024 [3][4] - The company is successfully reaching younger consumers, with millennials and Gen Z driving growth in fee-based premium cards, which are the fastest-growing segment in the industry [5][6] Group 2: Fee-Based Model - The fee-based structure of American Express creates loyalty and a recurring revenue stream, with card fees growing at 16% in 2024, accounting for nearly 13% of total revenue [7] - Approximately 70% of new card acquisitions are for fee-based cards, with expectations for continued mid- to high-teen growth in fees for 2025 [7][8] Group 3: Dividend Growth - American Express has a history of paying dividends since 1989, with a 200% increase over the past decade and a recent 17% increase from 0.70 to $0.82, reflecting management's confidence in the company's strength [9]