Greg Abel's Berkshire Hathaway Collected $479 Million in Dividends Last Year from an American Express Stake That Cost $1.3 Billion. You Can Put the Same Principles to Work for Yourself.
Key Points
Never underestimate the power of dividend-paying stocks.
When they grow over time, patient shareholders can be rewarded enormously.
Berkshire Hathaway's ownership of American Express shares demonstrates that perfectly.
When most of us think of Berkshire Hathaway, we rightfully think of Warren Buffett, who built the company -- and ran it for more than 60 years. But at age 96 now, Buffett has retired, putting a longtime lieutenant, Greg Abel, in charge.
Abel is making some moves of his own, but he -- and Berkshire shareholders -- are also benefiting from moves that Warren Buffett made long ago. Case in point: American Express (NYSE: AXP). Read on, to learn how Berkshire is collecting much more from American Express than it paid for it.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Meet American Express
Berkshire Hathaway has been an amazing stock performer for decades (especially a few decades ago), but American Express is no slouch, either:
American Express |
Average Annual Gain |
|---|---|
1 year |
(2.97%) |
3 years |
28.33% |
5 years |
13.92% |
10 years |
18.56% |
15 years |
14.13% |
Source: Morningstar.com, as of October 13, 2026.
Over more than 175 years, American Express has grown into a multifaceted financial services company, known most these days for its payment cards. But it also offers banking services, travel support, and payment and expense management tools for businesses. It's also home to a major global electronic transaction network.
Its second-quarter earnings report featured earnings per share (EPS) up 11% year over year, with revenue up 10%. Better still, the company reported card-member spending up, too, by 9%.
The company has long been a dividend payer, and it recently sported a 1.2% dividend yield. Add in the effect of stock buybacks, and the company's total yield is more like 4.7%.
Berkshire's American Express Stake
In Berkshire Hathaway's last annual report, for 2025, Greg Abel explained that "a large portion of our [stock] portfolio is concentrated in a small number of American companies such as Apple, American Express, Coca-Cola, and Moody's -- businesses we understand well, have a high regard for their leaders, and expect will compound over decades."
Berkshire bought into American Express over multiple years, ending in 1995. The total cost: $1.3 billion. In the 2025 letter, Abel notes that as of the end of 2025, Berkshire owned 22% of American Express, for a market value then of $56 billion. Most amazing, though, is that Berkshire collected a whopping $479 million in dividends from the company in 2025. At that rate, a mere three years of dividends would more than pay for the cost of the shares.
How is that possible when American Express's dividend yield was recently just 1.2%? Well, it's all because healthy and growing dividend payers tend to increase their payouts over time. American Express's recent total annual dividend payment was $3.54 per share, and that's up from $2.08 in 2022 and $1.22 in 2016.
American Express and you
What can you take from this story? Well, you might want to consider investing in American Express. Its shares actually look a bit undervalued, with a recent forward-looking price-to-earnings (P/E) ratio of 15.3, a bit below the five-year average of 16.8.
Better still, consider looking into any well-priced, healthy and growing dividend payer -- aiming to hang on for years, if not decades. The power of holding on to growing dividends is abundantly clear from Berkshire Hathaway's long-term investment in American Express.
American Express is an advertising partner of Motley Fool Money. Selena Maranjian has positions in American Express, Apple, and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express, Apple, Berkshire Hathaway, and Moody's. The Motley Fool has a disclosure policy.