1 Top Dividend Stock to Buy With Double-Digit Dividend Growth and an Aggressive Share Repurchase Program

• American Express (AMEX) has accrued its dividend by 90% successful the past 5 years.

• AMEX's concern exemplary allows it to seizure gross from aggregate sides of a transaction.

• AMEX's fastest-growing demographics are millennials and Gen-Z customers.

• 10 stocks we similar amended than American Express ›

"Dividend stock" is astir apt not your archetypal thought erstwhile you deliberation of American Express (NYSE: AXP), but it is, indeed, a dividend stock. As of Jan. 15, its dividend output is conscionable astir 0.9%, which is beneath the S&P 500 average.

That said, the institution has been assertive with yearly dividend increases and stock repurchases. Its dividend implicit the past 4 payouts was $0.82 quarterly, oregon $3.28 annually. That's 17% higher than the erstwhile year's dividend and much than 90% higher than what it was 5 years ago.

Dividend aside, AMEX has been assertive with repurchasing shares. In the 3rd quarter, it repurchased astir $2.3 cardinal worthy of shares (7.3 cardinal bought). That makes good implicit $25 cardinal spent connected repurchases successful the past 5 years.

One thing's for sure: Investors don't person to interest astir the sustainability of AMEX's increasing dividend and stock repurchases. In the 3rd quarter, its $0.82 dividend was lone astir 19% of its diluted net per stock (EPS) for the 4th ($4.14).

AMEX says it expects full-year EPS to beryllium betwixt $15.20 and $15.50, much than capable to enactment the $3.28 it paid out. That leaves AMEX with plentifulness of wealth to proceed investing successful and expanding the business.

AMEX trails Visa and Mastercard successful cards and acceptance worldwide, but that's by design. AMEX has positioned itself arsenic the luxury recognition paper company, leaning connected its perks to pull and clasp customers. That premium branding has enactment AMEX successful a unsocial -- and lucrative -- concern position.

First, radical are consenting to wage highly precocious yearly fees to unlock the card's premium perks. This provides a guaranteed income that fundamentally works arsenic a subscription.

It besides helps that AMEX operates its ain outgo web and issues its ain cards, allowing it to gain wealth from transactions, involvement connected balances, and merchant fees. Conversely, Visa and Mastercard run the outgo networks, but a abstracted slope issues the cards.

AMEX has positioned itself good for semipermanent success, opening with its diligence successful attracting and retaining younger customers. Around 64% of caller AMEX accounts globally were opened by millennials oregon Gen-Z customers. AMEX besides noted that these customers person astir 25% much transactions than different customers.