Can American Express Keep Up With Its Swelling Dividend?

American Express (AXP) is set to pay out $0.95 per share on May 8, 2026, the first installment at the new dividend rate after a 16% increase from $0.82.

The question for income holders is whether this premium card network can keep funding a faster-growing payout.

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American Express (NYSE: AXP) is set to pay out $0.95 per share on May 8, 2026, the first installment at the new dividend rate after a 16% increase from $0.82. With the stock at $319.21, the question for income investors is whether this premium card network can keep funding a faster-growing payout.

American Express paid $2.271 billion in dividends in 2025 against $15.0 billion in free cash flow and $10.83 billion in net income. On a per-share basis, the $3.80 annual payout against FY2025 EPS of $15.38 consumes about a quarter of profits.

Against management's FY2026 EPS guidance of $17.30 to $17.90, the payout ratio drops to roughly 21.6%. There is a wide margin of safety here.

As a card issuer, American Express runs structurally levered. Q3 2025 showed $32.42 billion in equity against $265.13 billion in liabilities, but cash of $54.7 billion dwarfs the dividend bill. Credit quality is improving, with the net write-off rate at 2.0%, down from 2.1%. Specific net debt-to-EBITDA and interest coverage figures are not broken out cleanly for a card network, a gap worth noting.

Amex held the dividend at $0.18 through 2008 and 2009 without cutting, then resumed growth. The recent two-year cadence of 17% and 16% increases is the fastest stretch in years.

CEO Stephen Squeri said on the Q1 2026 call: "We delivered 10 percent FX-adjusted revenue growth and 18 percent EPS growth in the quarter. Our credit performance remained excellent." He also linked the 2026 dividend hike directly to guidance for 9% to 10% revenue growth, signaling the increase is supported by operating momentum.

Dividend Safety Rating: Very Safe. An FCF payout ratio of 16%, OCF coverage above 7x, premium-customer billed business of $428 billion in Q1 2026, and zero cuts since 1999 form a strong case. The income case strengthens if premium card spending continues compounding at high-single-digit rates, and it weakens if a sharp consumer recession or credit card interest rate caps materialize — though even then the dividend retains substantial cushion. The May 8 check is as secure as they come.

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