This Warren Buffett Favorite Just Boosted Its Dividend: Is the Stock a Buy?
Initiating a dividend hike is the ultimate sign that a company's management team is confident in a company's ability to generate profit. Responsible management wouldn't hike the dividend if there wasn't enough profit growth to support a higher payout to shareholders.
Financial services company American Express (NYSE: AXP) just upped its quarterly dividend per share by 15.4% to $0.60. This is a dividend that has seen steady growth since the early 2000s and is apparently more focused on returning its profits to investors lately.
Warren Buffett and his holding company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) likely appreciate the growing dividend that AmEx provides. But there's another equally important component to why American Express stock has been among Berkshire's holdings since 1994: its share price appreciation.
Source Fool.com
