Key Points
- MCD and AXP are great dividend payers that are worth stashing away for the long haul, given their catalysts and modest valuations.
- MCD stands out as a fantastic market share taker amid its value menu push, while Amex might gain momentum with younger cardholders following the latest price (and perk) hikes.
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It’s been quite a wild ride for markets over the past seven years, from the short-lived COVID-19 crash in 2020 and the nearly year-long bear market in 2022 to the tariff chaos that unfolded in the April 2025. Despite the ups and downs, the rollercoaster ride has been worth staying on. Of course, it’s easy to invest when stocks are in the midst of a powerful bull market led by a profound technological revolution. Indeed, valuation concerns aside, the AI revolution really does stand out as a revolution. And it’s been lifting many boats in the market waters, including some of the steady dividend payers.
In this piece, we’ll look at two of the most impressive dividend payers underneath the hood of my portfolio that have helped power a good mix of dividend growth and capital appreciation. Though they’ve been true powerhouses of performance, I still view the names as worth hanging onto or even buying for those with new money to put to work. Of course, the valuations may not be as appealing anymore. But given the dividend growth potential and potential for reignited earnings growth moving forward, I certainly wouldn’t sleep on the following defensive powerhouses.
The same could be said for many stocks after yet another bullish first three quarters of gains are now in the books. Either way, I have no plans to sell the following names, even if some skeptics have fears about a frothy market that’s overdue for a correction.
McDonald’s
Loading stock data...McDonald’s (NYSE:MCD)stock is really one of those names you can comfortably buy and hold for the long haul. Undoubtedly, shares have been somewhat choppier in recent years, thanks in part to the effects of inflation, which has sent prices of everything from labor to ingredients and everything in between higher.
Though McDonald’s could have done a better job of communicating the value proposition in the earlier waves of inflation, I do think the golden arches has done a fantastic job of winning back the love of diners with its latest value menu. In fact, Citi analyst Jon Tower sees MCD stock rising to $381 per share, thanks in part to the value menu.
Add new menu innovations into the equation, and it won’t take a whole lot to smash expectations in the coming quarters. The big question going into the next round of quarterly earnings is whether McDonald’s can take share from its rivals. Either way, I view the more than 6% dip in the stock as completely unwarranted. So, if you seek a low beta (0.50), a nice dividend (2.36%), and the potential for more dividend hikes, look no further than the name while it’s trading at 22.6 times forward price-to-earnings (P/E).
MCD’s dividend currently yields 2.36%, or $1.77 per share quarterly.
American Express
Loading stock data...American Express (NYSE:AXP)is another blue chip that keeps finding new ways to pay dividends. The yield might now sit at less than 1%, but given the catalysts that could ignite earnings, I wouldn’t count out the potential for above-average dividend hikes in the coming years. Indeed, American Express has done a fantastic job of winning the business of younger crowds.
In a prior piece, I briefly remarked on the latest price hikes on the premier Platinum card. The latest Platinum perks are good enough, at least in my view, to justify paying $200 more for the card. Of course, the Platinum card has more value to offer those who make use of the $3,500 worth of perks. $3,500 in value for just shy of $900? Sounds like a pretty good deal.
With a strong, premier brand in the credit card scene and the love of Millennials and even Gen Z, I view American Express as a future-proof dividend grower whose stock might be worth a price hike in the coming months.
The stock trades at 18.7 times forward P/E, which seems too low given the thematic tailwinds and timely growth drivers (like recent price hikes) at hand. The stock is up 128% in two years, and earnings are on tap in just over two weeks’ time. I think Amex is in for another decent quarter and view the latest 3% dip, driven by consumer jitters, as overdone.
AXP’s dividend currently yields 0.99%, or 82 cents per share quarterly.
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