American Express's Stock Rallies After Dividend Hike, New Stock Buyback Plan

Shares of American Express Co. rose 1.6% in premarket trade Tuesday, after the financial services company raised its dividend and set a new stock buyback program. The new quarterly dividend of 32 cents a share, up 10% from 29 cents a share, will be payable Nov. 10 to shareholders of record on Oct. 7. The new buyback program of 150 million shares replaces the previous 150 million-share program, which had about 50 million shares remaining. At Monday's stock closing price of $63.42, the buyback program would be valued at $9.51 billion, and the new annual dividend would imply a dividend yield of 2.02%, compared with the aggregate yield for the Dow Jones Industrial Average of 2.48%, according to FactSet. The stock has dropped 8.8% year to date through Monday, while the Dow has gained 3.8%.