Summary
American Express Company (AXP) announced on June 28, 2017, that the Federal Reserve did not object to its capital return plans. This allows the company to increase its quarterly dividend to $0.35 per share starting in the third quarter of 2017, subject to final Board approval. This signals confidence in the company's financial health and its ability to generate sufficient capital. Furthermore, AXP plans to repurchase up to $4.4 billion of its common shares between the third quarter of 2017 and the second quarter of 2018. This share buyback program, along with the increased dividend, is intended to return value to shareholders. The company may utilize Rule 10b5-1 trading plans to facilitate these repurchases, allowing for consistent execution even during internal trading blackout periods. Investors should monitor the execution of these capital return initiatives as they could positively impact share price and provide a reliable income stream.
Key Highlights
- 1Federal Reserve approval received for capital return plan.
- 2Quarterly dividend to increase to $0.35 per share, effective Q3 2017 (subject to Board approval).
- 3Authorization for up to $4.4 billion in common share repurchases.
- 4Share repurchase period is Q3 2017 through Q2 2018.
- 5Company may use Rule 10b5-1 trading plans for share repurchases.
- 6Press release dated June 28, 2017, provides further details.
- 7Results of company-run stress tests under Regulation YY available on Investor Relations website.