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Thoughts on Mastercard, Visa and other payment enablers

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  • Jun 26th, 2018 8:25 pm
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[OP]
Deal Expert
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Apr 21, 2004
56484 posts
21536 upvotes

Thoughts on Mastercard, Visa and other payment enablers

Mastercard stock gains as analyst says it can reach a $1 trillion market value in a decade
https://www.marketwatch.com/story/maste ... 2018-06-22

From a current market cap of $200m, can MA really reached a trillion in a decade or so time? Are Square, Apple Pay, Google Wallet making a dent on Visa and Mastercard lockhold? I'm not interested in bitcoin at the moment. :)
4 replies
Deal Addict
Jul 27, 2017
2180 posts
949 upvotes
MA market cap is $210.339 Billion

I would buy MA over V or AXP

MA survived the 2009 meltdown & all the corrections along the way, including it's 10:1 split in January 2014 - my guess is $500 billion in 10 years
Deal Fanatic
Jun 3, 2009
5545 posts
1397 upvotes
Montreal
V and MA won't do much in China where Weixin Pay and Alipay make them obsolete and DOA. India and the rest of emerging markets will be the next area of growth though.

Both stocks usually look very overvalued but they will most likely stay that way for the foreseeable future. I have pretty much averaged up every single time but cashless is the future.
Deal Fanatic
Feb 4, 2015
8884 posts
5136 upvotes
Canada, Eh!!
Own both V and MA... everytime I sell... end up buying for higher later so decided to just buy bit of both and let them run.
2022: BOC raised 8 times and MCAP raised its prime next day.
2017 to 2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
2020: BOC dropped rates 3 times and MCAP waited to drop its prime to include all 3 drops.
Deal Addict
Dec 11, 2007
1890 posts
482 upvotes
Markham
$1T in a decade at a reasonable valuation? I find that unlikely. That would require a compounded growth rate of 17% for the next decade, while maintaining its extremely high multiple. A much more likely outcome is a decline of growth rate combined with multiple compression.

V is one of the biggest holdings in our portfolio but like MA, much of the anticipated growth is already priced in. I'll be really happy if it delivers 17%/yr for the next decade, but I'm not expecting it. But I will say, out of all the high flyers in the market these days, these 2 companies probably have the best odds of actually growing into their sky high valuations. Their biggest risk is probably regulatory, due to them being TOO profitable.

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