You Won't Believe How Much Money Berkshire Hathaway Gets From American Express Dividends
Key Points
Berkshire Hathaway has owned American Express stock for more than 30 years.
The stock has outperformed the S&P 500 over the past decade.
As American Express continues to raise its dividend, the yield on a cost basis for Berkshire Hathaway rises.
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American Express (NYSE: AXP) is one of Berkshire Hathaway's (NYSE: BRKA)(NYSE: BRKB) longest-held stocks. It first bought the stock way back in 1964. It later sold that position but reopened it in 1991 and hasn't sold it since. In fact, it's one of the stocks that Warren Buffett said he'd never sell. But now that Buffett is no longer CEO, could the stock be on the chopping block?
New CEO Greg Abel made it clear that he's not looking to change things up at the company. Beyond that, however, if you understand what American Express stock does for Berkshire Hathaway, you'd see how lucrative it is and how much sense it makes to keep it in the portfolio.
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Image source: American Express.
Berkshire Hathaway bought American Express stock over a several-year period, ending in 1995. Today, it owns 151,610,700 shares, or 22.1% of the entire company, worth more than $46 billion.
American Express stock has crushed the market performance-wise over the past 10 years, with a total return of 496% compared to 305% for the broader index. But Berkshire Hathaway gets much more than unrealized gains on this investment.
American Express' dividend yields 1.07%, which isn't terrific. In fact, it's below the S&P 500 average of 1.15%.
However, the yield on the cost basis is much higher than that, since the dividend has grown over the past three-plus decades in which Berkshire Hathaway has owned the stock. Berkshire Hathaway paid about $1.3 billion in total for its stake in American Express, making its cost basis about $8.60 per share.
The annual dividend per share is $3.80, which means it's making 44% a year on its original investment just in dividends. That worked out to $479 million in 2025 alone and makes more every year as American Express raises the dividend.
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American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
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