Today I wrote puts on American Express. From the perspective of shareholders, Amex is the class of the space. They earn higher fees from merchants than their competitors. They also have a model where they source their own customers and vendors instead of using a third party. This generates even more fee income. They also earn plenty from interest as they have the highest networth cardholders and experience the lowest writedowns of bad debt in the industry.
How well do they reward shareholders? Dividend yield is 1.3% (and growing!) while share buybacks run over four times the rate of dividends. Dividends have increased 4 consecutive years and historically have gone up every year except during the period they company was disallowed from doing so by the Fed due to TARP requirements. The company has also spent over 41 billion repaying long term debt over the last three years. Negatively, there is some dilution from issuance of new stock but the rate is far less than what is being repurchased.
I sold AXP150508P00077500 and collected 2.04 per share. That is 20.44% return on capital at risk. Break even is at 75.46 or 3.99% below the current spot price. That is a Warren Buffet level return on an actual Warren Buffet stock pick.
Devour your prey raptors!