American Express (NYSE: AXP) stands out as a key player in the financial industry, backed by Berkshire Hathaway’s endorsement. The company’s strong brand presence and revenue growth indicate a promising future, although its current valuation might deter some investors.
Key Insights into American Express
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American Express, a leading credit card provider, enjoys a solid market position driven by economic expansion.
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Berkshire Hathaway’s significant investment in American Express underscores the company’s potential for growth.
Berkshire Hathaway holds a diverse portfolio valued at $328 billion, with one standout financial stock showing remarkable performance over the past five years. As of Feb. 9, this financial stock has surged by 180%, or 198% when factoring in dividends.
While Apple has historically dominated Berkshire Hathaway’s portfolio, American Express has been gaining ground with a 22.1% ownership stake. This strategic investment has increased over time, now representing 16.5% of the conglomerate’s portfolio, thanks to Amex’s stock buyback initiatives.
A Closer Look at American Express
If a company enters Berkshire’s portfolio, it signifies high regard from Warren Buffett and his team. American Express impresses with its strong brand presence in the credit card industry, offering premium cards with exclusive benefits tailored for affluent customers.
American Express’s ability to raise annual fees demonstrates pricing power, with fees per card increasing by 75% from 2020 to 2025. Additionally, the company maintains lower delinquency and charge-off rates compared to industry averages, reflecting its robust financial health.
Noteworthy is Amex’s consistent growth trajectory, supported by economic expansion and the shift towards cashless transactions. Over the past decade, the company has seen a 120% increase in revenue and a 205% rise in diluted earnings per share, with a long-term goal of double-digit top-line growth.
Assessing Valuation and Investment Potential
Despite American Express’s impressive performance, its current price-to-earnings ratio of 23.3 raises concerns among investors. The stock’s valuation has expanded by 124% in the past decade, prompting cautious investors to wait for a more favorable entry point.
Is American Express a Buy?
Before considering an investment in American Express, investors should explore alternative opportunities. The Motley Fool Stock Advisor team recently identified 10 top stocks with significant growth potential, excluding American Express from the list.
For instance, investments in Netflix and Nvidia based on previous recommendations have yielded substantial returns, highlighting the value of diversified investment strategies. Stock Advisor’s impressive average return of 886% surpasses the S&P 500’s performance, emphasizing the importance of expert guidance in stock selection.
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*Stock Advisor returns as of February 13, 2026. American Express is an advertising partner of Motley Fool Money. Neil Patel has no position in any stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway.
