Core Viewpoint - The article discusses the potential of dividend growth stocks as a strategy for long-term investors amidst market chaos in 2025, highlighting three specific stocks as attractive buying opportunities. Group 1: American Express - American Express is well-positioned to withstand economic downturns due to its focus on wealthier customers and a low net write-off rate of 2.1% in Q1 2025, which is the lowest in the industry [4][3]. - Over half of American Express's revenue comes from credit card swipe fees, and 14% comes from annual fees, providing diverse revenue streams that can support the company during recessions [5]. - The stock is currently priced around $252 with a dividend yield of 1.16%, and the company has increased its dividend by 17% earlier this year, making it a strong candidate for long-term investment [6]. Group 2: Alphabet - Alphabet, the parent company of Google, has recently started paying dividends with a current yield of 0.52% at a share price of around $152, which is considered cheap given its growth potential in AI and cloud computing [7]. - Google Search revenue grew by 12.5% year-over-year to $54 billion, and its cloud division saw a 30% year-over-year revenue increase, indicating strong performance despite competition [8]. - Alphabet's annual dividend per share is $0.80, significantly lower than its free cash flow per share of $5.74, suggesting ample capacity for future dividend growth [9]. Group 3: Ally Financial - Ally Financial is currently trading at $31.60 with a high dividend yield of 3.8%, making it an attractive option for investors seeking strong and growing dividend income [11]. - The company, which operates as a digital bank focusing on automotive loans, faced challenges due to rising interest rates but is now seeing an expansion in its net interest margin (NIM), which increased to 3.31% from 3.16% year-over-year [12][13]. - Ally has the potential to grow its dividend per share again after being stagnant at $0.30 for the last 10 quarters, making it a compelling dividend growth stock [14].

Group 1: American Express - American Express is one of the largest credit card issuers globally and operates the third-largest payments network in the U.S., providing a vertical integration advantage [3] - The company serves a premium customer base focused on travel, entertainment, and food, generating revenue from card swipe fees, credit card loan balances, and annual fees [4] - Concerns exist regarding the impact of a potential consumer spending recession on American Express's revenue streams, particularly after Delta Airlines reduced its Q1 revenue guidance [4] - Despite these concerns, Delta's premium, international, and loyalty revenue are growing as expected, indicating resilience in American Express's premium customer base [5] - American Express's stock is currently available at a discounted price-to-earnings (P/E) ratio of 18, down 20% from its highs, presenting a buying opportunity [5] - The company has a long history of weathering economic challenges and is expected to create wealth for shareholders in the long term [6] Group 2: Alphabet - Alphabet, the owner of Google, YouTube, and Google Cloud, is facing stock market pressure due to concerns about competitive threats from artificial intelligence (AI) [7] - Fears exist that users may switch from Google Search to AI-driven tools like ChatGPT, potentially reducing Alphabet's advertisement revenue [8] - However, Alphabet's financial performance contradicts these fears, with Google Search revenue increasing from $48 billion in Q4 2023 to $54 billion in Q4 2024 [9] - The integration of AI tools into Google Search is leading to an increase in search queries, countering Wall Street's concerns [9] - Google Cloud is experiencing significant growth, with an annual revenue run rate of $48 billion and a year-over-year growth rate of 30% [10] - YouTube is generating over $50 billion in annual revenue, which, along with Google Cloud, can offset any potential declines in Google Search revenue [11] - Alphabet's stock is trading at a P/E of 20, with consolidated revenue growing over 10% per year, making it a strong buy-and-hold investment during the current market correction [11]