Mastercard (MA) is a global leader in electronic payments serving as a processor, franchisor and advisor to approximately 25,000 financial institutions for their credit, debit and other payment programs.
The company earns in excess of a 25% return on equity and has grown profits from $1.76 in 2004 to $18.70 in 2011 and its dividend from $.09 in 2006 to $.60 in 2011.
While the 2008-2009 pullback in global consumer spending impacted the gross dollar volume of transactions, the company continued to grow; further improvement should come as a result of:
(1) the global shift in the payments industry from paper to electronics,
(2) MA expands outside the US,
(3) innovation in its product portfolio [e-commerce, mobile commerce, pre-paid cards],
(4) a continuing stock buyback program.
(1) the global credit crisis has impacted growth negatively,
(2) difficulty controlling costs in a rapidly expanding business,
(3) lawsuits involving currency conversions and antitrust,
(4) tough regulatory environment.
Mastercard is rated A++ by Value Line, it has no debt and its stock provides a .3% yield.
|Stock Yield||Dividend Growth Rate||Payout Ratio||# Increases Since 2002|
|Debt/Equity||ROE||EPS Down Since 2002||Net Margin||Value Line Rating|
*MA has only paid a dividend for 6 years
Note: MA stock made great progress off its March 2009 low, quickly surpassing the downtrend off its June 2008 high (red line) and the November 2008 trading high (green line). Long term, the stock is in an uptrend (straight blue lines); intermediate term, it is in an uptrend---though it is currently right on its lower boundary (purple lines). The wiggly blue lines are Bollinger Bands. The Aggressive Growth Portfolio owns a full position in MA. The upper boundary of its Buy Value Range is $381; the lower boundary of its Sell Half Range is $546.
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