American Express (NYSE: AXP) could be an appealing stock heading into its second-quarter earnings report on July 24. The investment idea is a simple one: the company continues to attract high-spending premium customers, is returning significant amounts of cash to shareholders, and the stock remains below the highs it reached in December. Combined, these factors create an interesting opportunity for long-term investors.
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Another key reason: Unlike many credit card companies that compete primarily on price, Amex focuses on premium consumers who tend to spend more and remain loyal to the brand. That strategy has helped the company deliver strong financial results even in an uncertain economic environment.
Why American Express Stands Out
American Express has also demonstrated a strong commitment to rewarding shareholders. Earlier this year, the company announced a 16% dividend increase, raising its quarterly payout to 95 cents per share, beginning with the first quarter of 2026. Dividend growth is especially attractive for retirement investors because it provides a growing stream of income while signaling management’s confidence in the company’s future earnings.
During the first quarter alone, American Express returned $2.3 billion to investors. Approximately $700 million came through dividend payments, while another $1.7 billion was used to repurchase shares.
The company’s profitability also remains impressive. American Express generated a 35% return on equity (ROE) during the first quarter. In addition, executives and insiders have generally been adding to their positions rather than selling.
All Eyes on July 24 Earnings
Scheduled for July 24, expectations are high following a strong first quarter.
American Express reported its strongest spending growth in three years during Q1. Card member spending increased 9% on a foreign exchange-adjusted basis, demonstrating that customers continue to use their Amex cards despite higher interest rates and economic uncertainty.
Revenue from annual card fees was even more impressive. Net card fees increased 16% year over year on a foreign exchange-adjusted basis, extending an extraordinary streak of 30 consecutive quarters of double-digit growth. This recurring fee income has become an increasingly important part of American Express’s business because it is generally more predictable than transaction-based revenue.
Younger Customers Are Fueling Growth
The company’s younger customer base continues to be another major growth driver. Spending by Generation Z cardholders increased 38%, while Millennial spending rose 13% compared with American Express also benefited from updates to its flagship Platinum Card. The recent U.S. Platinum refresh helped accelerate spending among Platinum cardholders by six percentage points, with most of that growth coming from existing customers rather than new account holders. That suggests established members continue to find value in the premium benefits and rewards offered by the card.
What Investors Should Watch
Management has also expressed confidence about the business.
Of course, every earnings report carries risks. Investors will be watching not only revenue and earnings but also credit quality, loan losses, and management’s outlook for the remainder of the year. Any signs of weakening consumer spending or rising credit costs could pressure the stock in the short term.
Still, American Express enters its July earnings report from a position of strength. The company continues to grow spending across its premium customer base, expand high-margin fee revenue, reward shareholders through dividends and buybacks, and generate exceptional profitability. For retirement-focused investors seeking a combination of income, capital returns, and long-term growth, American Express remains one of the more compelling financial stocks to watch as earnings season begins.
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