AXP - This Ridiculously Cheap Warren Buffett Stock Could Help Make You Richer
2024-02-15 09:18:00 ET
Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) completed its $1.3 billion investment into American Express (NYSE: AXP) in 1995. Since then, its investment in the bank holding and payments giant has grown to $32 billion, and it received approximately $352 million in dividends in 2023 alone. Despite not buying any additional shares of American Express since 1995, Berkshire's stake has grown from nearly 10% to 21% stake through steady buybacks.
Today, American Express stock trades near an all-time high, so it might sound ridiculous to consider it cheap. However, when examining the financial giant's recent financial performance, its valuation could be considered cheap by certain metrics. So, let's dive into why American Express is a favorite stock of Warren Buffett's and why it is just as worthy of buying today as it was in the early 1990s.
American Express recently released its 2023 financial results, and it was a record-setting year on the top and bottom lines for the nearly 174-year-old payments company. Specifically, it generated $60.5 billion in revenue in 2023 and produced diluted earnings per share (EPS) of $11.21, a year-over-year uptick of 14% for each metric.
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This Ridiculously Cheap Warren Buffett Stock Could Help Make You Richer