Tag: MA

Why Mastercard Inc is a good long term investment

Summary

  • Mastercard has delivered positive dividend yield over the years.
  • Entering into P2P business could be a great thing for Mastercard.
  • MA has Positive earnings estimates

So far, Mastercard has been very investor friendly. Mastercard’s Return on Equities is 59.10%. In December, MasterCard announced a $4 billion repurchase program. The company considers its current valuation as relatively cheap for buying back the stock. It also paid a dividend of $0.19 on 6th April 2016.

Mastercard has consistently delivered a positive dividend yield.

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Investors also expect a positive Q1 Revenue for Mastercard. The wallstreet consensus of EPS is $0.84, while the estimize consensus is higher at $.85, also we can see that the actual EPS has outperformed the wallstreet consensus 7 out of 8 times.

Many Investment firms like EQIS Capital management, Auxier Asset Management, MUFG Americas etc have stakes in Mastercard. Institutional investors own ~79% of MA shares, which is a good thing, since this means that many big firms are betting on Mastercard.

 

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Time and again, we see that companies which evolve themselves and their product according to the changes in the industry have been the most successful ones. After its digital wallet – “MasterPass”, Mastercard is exploring the area of Peer – to-peer payment services via social media. It has a free cash flow of $45.9 Billion, and is looking out for partnerships with the social media giants Facebook or Twitter. Currently we see a lot of fintech companies like HiFrank, Prosper, Upstart, Puddle etc in the Peer-to-Peer lending market. Given the brand name, Mastercard if entered into P2P lending especially with tech giants like twitter, would definitely be successful.

Also, MA has good fundamentals, with a Return on Equity of 59.1%, EPS of $3.35. Since it has a cash rich business model, in turbulent times, it can cushion the dividends, and even debts.

According to our proprietary algorithm, which gives us the Analyst Confidence Meter, based on various fundamental parameters and analyst opinions, Mastercard has a 69% buy.

 

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The social media pulse, which tracks various social chatter, and analyses the sentiments for the stock, shows that Mastercard has 29% lower Social chatter than usual. The News Sentiment and Revenue Prediction are positive.

 


Disclaimer: This blog contains an aggregated view of analysts and opinions by the author. Do not consider this as financial advice. See http://stockal.com/legalities/