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American Express Shows Resilience in First Quarter, Sees Strong Growth Momentum



American Express, a leading integrated payments company, has demonstrated resilience and strong growth momentum in its first quarter performance, defying market challenges. Despite elevated valuation multiples in the market, American Express stands out with a compelling growth profile, reporting an impressive 11% year-over-year revenue increase and a soaring 39% rise in earnings per share.

The company, catering primarily to the premium segment of the credit card industry, highlighted robust customer engagement and increasing demand for its premium products in a challenging market environment. CEO Stephen Squeri emphasized the addition of 12.2 million new proprietary cards globally, surpassing a total of 140 million cards-in-force on its network.

Furthermore, American Express remains steadfast in maintaining strong credit metrics, with write-off and delinquency rates tracking below pre-pandemic levels. This reliability underscores the company’s ability to navigate economic uncertainties while sustaining growth.

In a strategic move to reward investors, American Express announced a substantial 17% increase in its quarterly dividend earlier this year, aligning with a consistent track record of dividend growth of 17%-21% annually since 2022. With an annual dividend yield of 1.2%, the company’s low payout ratio of 20% leaves ample room for future dividend hikes, making it an attractive proposition for income investors.

Looking ahead, American Express is poised for continued growth, fueled by its resilient business model and strong financial performance. While risks exist, such as the company’s liability-sensitive structure, prudent portfolio diversification and risk management strategies can mitigate potential downturns.

Rachel Adams

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