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Card issuers have been getting attention in the financial media in recent weeks because of Berkshire Hathaway's (BRK.A) recent purchases of Visa (V) and MasterCard (MA). These were likely the work of Ted Weschler and Todd Combs, not Buffett, but receive a lot of attention nevertheless. Buffett is also a fan of card issuers, and first bought shares in American Express (AXP) in 1964. Berkshire still has a 13% stake in the company.

With a growing number of consumers using debit and credit cards for in-store and online sales, card issuers have favorable long-term prospects. The big four - Visa, MasterCard, Amex, and Discover (DFS) - in the industry account for nearly all card transactions in the U.S. Every long-term investor should be familiar with these four companies.

Below is a snap shot of each company, displaying EPS (excluding non-recurring gains/losses), revenue per share, and return on equity. Visa and MasterCard are growing revenues and profits at the fastest pace, but they are also selling at high P/Es. Discover looks cheap on a P/E basis, but is expected to have difficulty growing earnings this year.

These are attractive entry points to invest into American Express or Discover as long-term holdings. Visa and MasterCard have high expectations from investors, hence the high P/Es. Investors might want to wait for a pullback before investing into Visa or MasterCard.

American Express

American Express was first established in 1850 as an express delivery company by the same founders as Wells Fargo (WFC). Today it generates more than $30 billion in annual revenue. It is the largest and most diversified among the Big Four.

YearEPSRevenue Per ShareReturn on Equity
20011.2816.9714.3%
20022.0118.2419.3%
20032.3120.1419.6%
20042.7423.3121.9%
20052.319.5527.4%
20062.8222.6333.1%
20073.2923.9535.8%
20082.3324.4522.8%
20091.5420.5714.8%
20103.3523.2425.0%
20114.0825.7426.0%

Current Share Price: $53

Price/Earnings: 13

MasterCard

MasterCard generates about $7 billion in annual revenue. It is the fastest-growing among the Big Four and generates the highest return on equity.

YearEPSRevenue Per ShareReturn on Equity
20041.7619.2124.4%
20051.9821.7622.8%
20063.3724.6418.8%
20078.0030.9933.4%
20089.0138.6256.7%
200911.1639.2939.5%
201014.0542.3234.0%
201118.7052.4539.5%

Current Share Price: $395

Price/Earnings: 21

Discover Financial Services

Discover generates about $7 billion in annual revenue, the same as MasterCard. However, MasterCard is growing at a much faster pace.

YearEPSRevenue Per ShareReturn on Equity
20071.7510.5815.0%
20081.1010.058.9%
20090.1012.390.6%
20101.2212.5911.8%
20114.0613.3627.0%

Current Share Price: $29.60

Price/Earnings: 7.3

Visa

Visa generates over $9 billion in annual revenue and generates roughly 38% of the credit card transactions and 60% of debit card transactions in the U.S.

YearEPSRevenue Per ShareReturn on Equity
20082.258.088.0%
20092.929.129.5%
20103.919.6411.9%
20114.9911.313.8%

Current Share Price: $115

Price/Earnings: 23

Source: Credit Card Issuers Make Great Long-Term Holdings