American Express' 2019 fourth-quarter earnings, announced late last month, beat Wall Street expectations.
With the company's adjusted annual profit coming in 12% higher in 2019 than in 2018, that was good news for the company and for shareholders.
If you invested $1,000 in the financial institution 10 years ago, your investment would be worth more than $4,000 as of Feb. 18, for a total return of 301%, according to CNBC calculations. By comparison, in the same time frame, the S&P 500 had a total return of just over 275%. American Express' current share price was slightly above $129 on Monday, down more than 4% in morning trading amid growing fears of the economic effects of coronavirus.
While American Express' shares have done well over the years, past performance is no sign of future results.
CNBC: American Express' stock as of February 2020.
American Express dates to 1850, when it started as a freight shipping company. The company began introducing financial products and services and by the 1950s, Amex launched its first consumer charge card.
In 1966, it put forth a corporate card program for businesses, and in 1991, created its first loyalty program, now called Membership Rewards. The program serves to incentivize users with benefits and encourage member loyalty.
Since then, American Express has continued to reiterate its financial offerings by introducing lines of debit and credit cards as well as banking services. Today, it's one of the world's largest financial corporations with more than 63 million cardholders.
Through the years, American Express stock gone up and down.
Like many financial institutions, the company saw its stock sink around the time of the 2008 recession. By February 2009, its share price landed at just over $11.
In February 2015, the market value of American Express fell by around $8 billion within 48 hours after it announced the loss of a lucrative contract with Costco, which was set to expire in March 2016. The contract termination had shareholders worried about how much revenue Amex would lose and how it would impact their investments.
In October 2017, it was also announced that Kenneth Chenault, chairman and CEO for 17 years, would step down in February 2018 as American Express struggled to find its place in a modern market.
Despite the problems, Amex stock returned 5.4% annually under Chenault's tenure. That's close to double the 2.6% annual return of the financial sector during that period.
American Express attributed its Q4 success to the "well-balanced mix" it's been able to strike between spending and fee and lending revenues. The card issuer reported that nearly 70% of new card members in 2019 went for fee-based products, which helped to grow card fee revenue by 17% last year.
Millennials are also big fans of Amex. In January, CNBC's Jim Cramer credited young people with helping the company reach its better-than-expected quarter. "Millennials are really signing up, 50% of the new cards. That business is great," Cramer said during a "Mad Money" lightning round.
This month, Amex also announced a new reservation booking tool for Platinum and Centurion members. The feature will allow cardholders to browse, book and manage reservations all in one place using their mobile device. And eligible users can make multiple reservations per day at over 10,000 restaurants worldwide.
If you are considering getting into investing, experts, including Warren Buffett, often advise starting with index funds, which hold a basket of companies. Because index funds aren't tied to the performance of a single business, they're less risky than individual stocks, making them a safer choice for beginners.
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