What American Express CEO Just Said Should Get Dividend Investors Very Excited

"Dividends are an excellent vehicle for creating long-term wealth. By focusing on dividend growth stocks, investors can juice their returns for powerful generational wealth. According to data from Hartford Funds, dividend growth stocks in the S&P 500 outperform all other classes of stocks over long periods. They have also contributed significantly to total returns, even in challenging decades like the 2000s when the broader index had negative returns but dividends provided positive annualized contribution."

"More importantly, while Buffett has trimmed positions in many stocks to raise cash in recent periods , seemingly preparing for a market crash, he has maintained his full stake in American Express without selling any shares. According to the latest filings, Berkshire Hathaway )( ) owns approximately 151.6 million shares of American Express. This makes it the second-largest position in the portfolio, representing 18% of the portfolio's total holdings, just behind Apple ( NASDAQ:AAPL ) at 20%."

"American Express continues to throw off substantial cash returns through its dividend. The current yield stands at around 0.8%, meager even in comparison to the 1.1% yield of the S&P 500. However, for long-term holders like Buffett, AmEx's yield on cost tells a different story. Yield on cost is the annual dividend divided by the original purchase price per share. It is a critical concept for dividend investors as it measures the current divid"

Dividend growth stocks have historically outperformed other stock classes and significantly contributed to total returns, even when broader indices underperform. American Express has generated substantial cash returns and has been a major, long-term holding for Warren Buffett since the 1960s, with key purchases and conversions in the 1990s. Berkshire Hathaway currently holds roughly 151.6 million AmEx shares, representing about 18% of its portfolio, and Buffett has not sold his stake amid other portfolio trims. AmEx's current dividend yield is about 0.8%, but yield on cost can be much more meaningful for long-term investors.

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