Meet the Dow Jones Dividend Stock That's on Pace to Beat the S&P 500 for the Fifth Consecutive Year. Here's Why It's Still a Buy Now.

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slowdown.10 stocks we like better than American Express ›The S&P 500 (SNPINDEX: ^GSPC) has doubled over the last five years largely thanks to mega-cap tech stocks like the "Ten Titans." Many value-focused companies that distribute a significant portion of their profits to shareholders through dividends have underperformed the index during this period of dominance for tech stocks. But not Dow Jones Industrial Average (DJINDICES: ^DJI) component American Express (NYSE: AXP).The financial services giant produced a 269% total return in the last five years and is on track to beat the S&P 500 for the fifth consecutive year in 2025.Here's why American Express continues to thrive in a growth stock-dominated market, and why it could still be a buy now, even at an all-time high.Image source: Getty Images.American Express acts as a payment processor and a bank by issuing cards and managing the risk associated with customers paying off their balances. Whereas Visa (NYSE: V) and Mastercard (NYSE: MA) serve only as the payment processor, passing the risk along to affiliated banks such as JPMorgan Chase and Citigroup. Visa and Mastercard's simplicity and capital-light business models yield far higher operating margins than American Express. But American Express has demonstrated that its approach offers significantly more upside potential and faster growth.Top-tier American Express cards come with relatively expensive annual fees, but also some generous perks. American Express attracts affluent customers who are highly likely to manage their spending well. Perks incentivize customers to use their cards for as many purchases as possible. The perks come at a cost, as American Express's member rewards expenses are roughly double the fees it collects from memberships. But it's worth it because American Express makes so much in discount revenue (merchant fees). It tends to charge higher fees to merchants than Visa and Mastercard to help offset the losses incurred on membership rewards.American Express has expanded its network, making it more attractive for merchants to accept its cards, even if they have to pay higher fees. The result is a snowball effect, where existing customers use their American Express cards more frequently, and prospective customers may make the decision to sign up for a card due to the perks and its widespread acceptance.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,730.25 +33.75 (+0.50%)Dow Futures46,728.00 +172.00 (+0.37%)Nasdaq Futures24,890.50 +163.75 (+0.66%)Russell 2000 Futures2,465.70 +15.30 (+0.62%)VIX15.76 +0.47 (+3.07%)Gold3,848.60 +39.60 (+1.04%)PortfolioSign in to access your portfolioSign inTop gainersCRNX Crinetics Pharmaceuticals, Inc. 45.91 +10.02 (+27.92%)QMMM QMMM Holdings Limited 119.40 +19.40 (+19.40%)EA Electronic Arts Inc. 193.35 +25.03 (+14.87%)SRRK Scholar Rock Holding Corporation 38.75 +4.26 (+12.35%)PPTA Perpetua Resources Corp. 21.16 +2.16 (+11.37%)Top losersCNXC Concentrix Corporation 47.66 -7.33 (-13.33%)MP MP Materials Corp. 68.63 -8.50 (-11.02%)KC Kingsoft Cloud Holdings Limited 15.64 -1.83 (-10.48%)IREN IREN Limited 41.86 -4.43 (-9.57%)OKLO Oklo Inc. 110.53 -8.60 (-7.22%)Most activeINTC Intel Corporation 35.50 +1.51 (+4.44%)OPEN Opendoor Technologies Inc. 8.81 -0.28 (-3.08%)SNAP Snap Inc. 8.27 -0.06 (-0.72%)NVDA NVIDIA Corporation 178.19 +0.50 (+0.28%)F Ford Motor Company 12.01 +0.39 (+3.36%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersGPUS Hyperscale Data, Inc. 0.4578 +0.0749 (+19.56%)GC=F Gold Dec 25 3,848.70 +39.70 (+1.04%)TLRY Tilray Brands, Inc. 1.1500 -0.0400 (-3.36%)EA Electronic Arts Inc. 193.35 +25.03 (+14.87%)BMNR Bitmine Immersion Technologies, Inc. 50.50 +0.93 (+1.88%)Top economic events