Is Mastercard ($MA) a Good Price & Good Company ? Find Out Here !
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
To that I asked, "why not both" ?
Wouldn't that have more upsides comparatively speaking ?
Having covered a handful of US banks and some Non-bank companies; I am keen to take this analysis to a Credit Card company for a spin.
Let's look at $MasterCard(MA)$ , its Q4 2022 earnings and see if it still fits the bill.
Sidetrack: Below is what I have covered; to test out this theory.
- Intel - Click here to read. Like the post ok. Tks.
- $Microsoft(MSFT)$ - Click here to read. Like the post ok. Tks.
- Netflix - Click here to read. Like the post ok. Tks.
- Goldman Sachs - Click here to read. Like the post ok. Tks.
- $Morgan Stanley(MS)$ Morgan Stanley - Click here to read. Like the post ok. Tks.
- BlackRock - Click here to read.
- UnitedHealth Grp - Click here to read.
- Citigroup - Click here to read.
- JP Morgan - Click here to read.
- $Bank of America(BAC)$ - Click here to read.
- Wells Fargo Inc - Click here to read.
- Jefferies Financial Group - Click here to read.
- It is the 2nd largest payment-processing corporation worldwide
- Founded in 1966 (57 years old company)
- Mastercard was borned out of an alliance of several banks & regional bankcard associations in response to BankAmericard issued by Bank of America, that later became Visa
- Prior to its IPO, Mastercard was a cooperative owned by > 25,000 financial institutions that issue the "Mastercard" brand card.
- On 25 May 2006, Mastercard was publicly traded at $39 per share
- Its affiliated card product / services includes Cirrus, Maestro, Mondex & MasterPass
- It grew to its present size and presence thru strategic mergers & acquisitions (M&A).
In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Financial Services Mastercard fare ?
Current stock price < 31 Jan 2022 stock price by -3.16% only. Resilient
Mastercard - Summary
- Total revenue came in at $5.8 Billion vs $5.2 (Q4 2021); thats a +12% (QoQ) gain
- Net income (GAAP) was $2.5 Billion vs $2.4 Billion (Q4 2021); thats a +6.0% (QoQ) gain
- Earnings per share (GAAP) was $2.62 vs $2.41 (Q4 2021); thats a +9.0% (QoQ) gain
- Earnings per share (non GAAP) is only marginally higher; negligible difference.
- With its core activity being a credit cards "payment system"; the key factors to focus would be its "transactions'volume" growth rate and the continent has the greatest potential to scale its growth.
- Q4 2022 Gross Dollar volume was $2.13 Trillion vs $2.11 Trillion (Q4 2021); thats up +8% (QoQ) gain
- Q4 2022 Purchase volume was $1.72 Trillion vs $1.549 Trillion (Q4 2021); thats a +11% gain.
Mastercard - Gross Dollar volume detailed breakdown based on card product
- Gross Dollar Volume (GDV) – This figure represents the aggregated dollar amount of purchases made and cash disbursements obtained with MasterCard-branded cards and the impact of balance transfers and convenience checks.
Mastercard - 3 Key Growth Indicators
- Above please find Mastercard's 3 Key Growth indicators - (a) Gross Dollar Volume (b) Cross-border Volume and (c) Switched transactions.
- All 3 key indicators are growing at a "healthy" rate despite Mastercard suspending its business operations in Russia since Mar 2022.
Mastercard - Other information
- To maintain its 2nd lead position, it is imperative to "grow" its customer base & enlarge the probability of a consumer reaches to use a Mastercard issued credit card versus a rival credit card.
- To that end, a +6.0% growth in Mastercards issued is a credible performance; given that the credit card market is both highly saturated & matured.
Mastercard's CEO on Q4 2022 Results:
As we look at the broader economy, we see the continued recovery of cross-border travel, with volumes up 59% vs a year ago and we're encouraged by Asia opening up further. While macroeconomic and geopolitical uncertainty persists, consumer spending has been remarkably resilient. We are well prepared to adjust our investment profile quickly if needed... Mastercard, CEO, Michael Miebach
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Why Mastercard Is Both A Good Price and Good Company ?
- Being an early pioneer of deferred payment, it has the lead time advantage to grow its customer base over many decades
- As the saying goes "money makes the world go round" and Mastercard has been supporting this and every step of the way.
- As the world economies gets more integrated and travelling more indispensable, the ability to go on a holiday without worrying about currency exchanges etc.. has quietly seeped into our lives; further endearing Mastercard to every working adult and somemore..
- Even with a "new" concept of Buy Now Pay Later (BNPL) gaining traction, Mastercard has already entranched this payment mode in its offerings and in the process curtailing the growth of competitors like "AfterPay" and "Klarna" and giving them a run for their customer base instead.
- Do you have at least one Mastercard credit card in your wallet ?
- Do you think Mastercard Inc is here to stay and worth a 2nd investment look ?
Please "LIKe" this post ok. Thanks. The rating is very important to me !
@TigerPM .
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Tks for reading my post.
Pls "LIKe" it ok. Tks.
The rating is very important to me. Tks tks!!