1 Top Dividend Stock to Buy With Double-Digit Dividend Growth and an Aggressive Share Repurchase Program

Core Viewpoint - American Express is demonstrating strong dividend growth alongside aggressive share buybacks, raising questions about its long-term investment value after a significant stock price increase [1][3]. Dividend Growth - The company has increased its dividend by 17% in March, reflecting robust business strength, with a current yield of 0.9% [5][6]. - American Express's annual dividend payments represent only 21% of the expected earnings per share for 2025, allowing for continued investment and potential future dividend increases [6][12]. Financial Performance - In the third quarter, American Express reported a revenue increase of 11% year-over-year to $18.4 billion and a net income rise of 16% to $2.9 billion, with earnings-per-share growth at 19% [7][8]. - The company has seen strong momentum, particularly in demand for its U.S. Platinum products, with account acquisitions doubling compared to pre-refresh levels [8]. Share Repurchases - In the first nine months of 2025, American Express returned $6.1 billion to shareholders, with $4.4 billion from share repurchases and $1.7 billion from dividends [9]. - The company has a history of aggressive share repurchases, returning $7.9 billion to shareholders in 2024, with $5.9 billion from buybacks [10]. Valuation and Market Position - The stock currently trades at a price-to-earnings ratio of about 25, up from 21 a year ago, reflecting its premium valuation in the financial sector [11]. - Despite the higher valuation, the company's strong earnings momentum and low payout ratio suggest that robust dividend growth is likely to continue [12].