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In this article, I will analyze four large, well known, non-bank financial companies. Two of these companies went public within the past five years, and post profits of billions of dollars with zero long term debt. The other two, while smaller, are also showing strong performance at this point in the economic cycle. I chose these four stocks because they are all positioned for growth in the coming quarters. As with all write ups, these are ideas, and not investment advice, and you are encouraged to do your own research prior to making any investments.

Mastercard (NYSE:MA)

Mastercard is well known as a worldwide provider of electronic payment services. Its stock was trading recently at about $396 per share, near the high end of its 52 week range of from $401.79 to $240.36. It is trading at a trailing price to earnings ratio of 21.2, and has a market capitalization of $50.3 billion. Its quarterly dividend was recently doubled to $0.30 per share, for a yield of 0.30%.

In the fourth quarter of 2011, Mastercard continued the pattern of every other quarter of the year; it beat analyst expectations. In all, excluding a one time $495 million after tax charge for a litigation settlement, earnings were $514 million, or $4.03 per share. The per share represented a 28% increase from the fourth quarter of 2010. For all of 2011, excluding one time factors, Mastercard reported earnings of $18.71 per share, a 33% increase versus the $14.05 reported in 2010.

Mastercard is on a long term growth trend. Despite its relatively frothy price to earnings ratio, its five year, projected PEG is 0.93. Its long term debt is zero. Good luck finding any large companies with those sorts of fundamentals. Mastercard was trading at $357 on February 1, 2011, but it still has long legs ahead of it for growth investors.

Discover Financial (NYSE:DFS)

Discover is a bank holding company, the bread and butter of which is electronic payments connected with the Discover credit card brand, and the Pulse automated teller network. Discover stock was trading recently at about $28 per share, near the high side of its 52 week range of $29.03 to $20.51. It is trading at a trailing price to earnings ratio of 6.9, and has a market capitalization of $14.9 billion. It pays a modest dividend of 10 cents per quarter, for an annual yield of 1.4%.

In its fourth quarter of 2011, Discover posted earnings of $513 million, or $0.95 per share, a 48% jump from the $0.64 per share earned in the fourth quarter of 2011. Full year fiscal 2011 earnings were $2.3 billion, or $4.06 per share, up over three fold from the $1.22 reported in 2010. While some of that rise was due to organic growth, much of it was due to credit turn arounds. In the third quarter alone, there was a $700 million turnaround in credit loss loan provisions, which flowed straight to the bottom line. Specifically, in 2010, Discover set aside $3.2 billion for loan losses. In 2011, that sum declined to $1.01 billion, a gain of over $2 billion. That will be missing in 2012, as all the easy credit quality gains are behind Discover and earnings comparisons will suffer as a result.

Analysts are looking for earnings for 2012 to be about $3.36 per share, though I believe that is a bit optimistic. Looking past 2012, Discover will be a revenue driven company. Many well-known institutional investors such as Blackrock, Inc. (NYSE:BLK) and Vanguard hold stakes greater than 5% of Discover's outstanding stock. I can see the case for revenues growing in the low to mid teens annually. In sum, Discover is selling so cheaply right now, there is not much downside. If growth continues as suggested in Discover's core business, it might be a real winner for patient investors.

Marsh & McLennan Companies, Inc. (NYSE:MMC)

Marsh & Mclennan is a holding company for a major international insurance brokerage and some smaller insurance and reinsurance outfits. Its stock was trading recently at about $32 per share, near the high end of its narrow, 52 week range of from $32.72 to $25.29. It is trading at a price to earnings ratio of 19, and has a market capitalization of $17.4 billion. If offers a quarterly dividend of $0.22 per share, for a yield of 2.7%.

Since losing money in 2008, Marsh & McLennan has been on a strong growth curve, reporting earnings in 2009 and 2010 of $1.02 and $1.00 per share, respectively. It is forecast to earn $0.45 per share in the fourth quarter of 2011, which if true would give it 2011 full year earnings of $1.75. There are no tricks in this large earnings improvement. Marsh's international insurance brokerage business is growing, especially overseas. Marsh & McLennan's other divisions show year over year growth as well. Analysts see company revenues increasing about 10% from 2010 to 2011, and another 6% in 2012.

Marsh & McLennan has shown a commitment also to reward shareholders. Its dividend increase to the current level, instituted in the third quarter of 2011, was the company's second dividend increase in 12 months. Marsh & McLennan is also in the midst of a $1 billion, share buyback plan. Marsh & McLennan's earnings have a more cyclical nature them than I like to see in a financial sector stock. Yet, it is on the upside of the cycle for now, and for those interested in an international brokerage, Marsh & McLennan is about as good as it gets.

Visa, Inc. (NYSE:V)

Visa is the world's largest electronic payment processor, and owns a variety of Visa card related assets and the Visa Plus global ATM network. Visa stock was trading recently for between $113 and $114 per share, very close to the high point of its 52 week range of from $114.90 to $70.45. That high point represents the all time high trade for this company, whose stock has only been publicly trading since 2008. Visa is trading at a price to earnings ratio of 20.2, and has a market capitalization of $76.6 billion. It recently raised its quarterly dividend by 47% to $0.22 per share, for an annual yield of 0.8%.

Since going public, Visa has posted double digit annualized profit growth with every single quarter. Its fiscal year ended September 30, so in its first quarter of fiscal 2012, Visa did not disappoint, posting revenues of $2.5 billion, up 14% on a year over year basis. Profits were $1 billion, or $1.49 per share, a 21% year over year increase. Analysts have been scrambling to raise their estimates on Visa, which now stand at earnings of $5.95 and $6.95 per share for 2012 and 2013, respectively.

Visa has tremendous momentum, as its stock has risen from $89 per share in late November 2011. It also carries zero long term debt. While the way forward may not be as rapid nor as steep in terms of price growth as the past few months, with renown value investors like Warren Buffett on board, there is never a bad time to get invested in a great company.

Source: 4 Non-Bank Financials Positioned For Growth