5 Best Dividend Stocks To Buy According To Warren Buffett

4. American Express Company (NYSE: AXP)

The financial services company American Express Co (NYSE: AXP) is a long-running investment of Warren Buffett’s Berkshire. The firm held a stake worth $18.33 billion in AXP at the end of the latest quarter. Shares of AXP surged 18% year to date, extending ten-year gains to 218%. The company is also well known for offering robust cash returns. It currently offers a quarterly dividend of $0.43 per share. American Express raised dividends in the last two straight years while its 10-year average dividend growth rate hovers around 9.10%.

In one of their investor letters, Bretton Fund commented on a few stocks including American Express. Here is what Bretton Fund stated:

“American Express has elements of both a bank (it extends credit card loans) and a payments processor (most of its revenue is fees from cardholders and merchants) and was hit pretty hard by Covid-19, though we expect most of the impact will be transitory. It has a relatively diversified customer base overall, but a meaningful portion of its card activity is from business travel, which…there wasn’t a lot of last year. Similar to the banks, American Express recognized loan losses in anticipation of large defaults, though it’s not clear all of that will come to pass. Its stock returned -1.1%, while earnings per share were down 53%.”