MasterCard and Visa: What Weak Economy?

Despite economic gloom, MasterCard (NYSE:MA) shares surged almost 7% to $356.85, approaching record levels after the credit card company posted a 38.4% jump in third-quarter earnings

So far this year, MasterCard (NYSE:MA) shares have risen more than 60%, making it the fifth best performer on the S&P 500 Index (SPX). Visa’s (NYSE:V) stock is up about 30% and on average, is expected to reach $104.93 from where it stands now at $92.73. While business is booming for the two companies, uncertainty around new interchange regulations may be easing, which set the limit on the amount of fees banks can charge merchants for every debit-card swipe. The new rules also give retailers, instead of the banks, a greater ability to choose their processing network to rout transactions over. Visa (NYSE:V), rather than MasterCard (NYSE:MA) holds a larger percentage of the debit card market in the U.S. Therefore, in order to keep business from jumping to the competition Visa (NYSE:V) has to ramp up rebates and incentives to merchants.

“The clouds surrounding the Durbin Amendment (the interchange fee cap) have mostly cleared,” he said. “Over the years ahead, we expect MasterCard to deliver strong organic revenue growth, operating leverage, a declining tax rate, and a declining share count, all of which create a formula for strong EPS growth,” according to MarketWatch.

  • Mastercard Incorporated (NYSE:MA): The shares recently traded at $357.66, up $23.36, or 6.99%. Its market capitalization is $45.44 billion. They have traded in a 52-week range of $215.00 to $364.80. Volume today was 3,068,018 shares versus a 3-month average volume of 1,585,260 shares. The company’s trailing P/E is 22.17, while trailing earnings are $16.14 per share. The company pays a dividend of $0.60 per share for a dividend yield of 0.20%. About the company: MasterCard, Inc. is a global payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of financial institutions. The Company offers transaction processing services for credit and debit cards, electronic cash, automated teller machines, and travelers checks. Get the most recent company news and stock data here >>
  • Visa, Inc. (NYSE:V): The shares recently traded at $91.50, up $1.47, or 1.63%. Its market capitalization is $62.82 billion. They have traded in a 52-week range of $66.50 to $95.87. Volume today was 6,111,623 shares versus a 3-month average volume of 5,967,480 shares. The company’s trailing P/E is 17.21, while trailing earnings are $5.32 per share. The company pays a dividend of $0.88 per share for a dividend yield of 1.00%. About the company: Visa Inc. operates a retail electronic payments network and manages global financial services. The Company also offers global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. Get the most recent company news and stock data here >>