Seeking Alpha

MasterCard announces 10:1 split, 83% dividend hike, $3.5B buyback

  • With shares trading well above $700, MasterCard (MA) has decided to carry out a 10:1 split. Share distribution is set for Jan. 21; the record date is Jan. 9. (PR)
  • The transaction processing giant is also hiking its quarterly dividend by 83% to $1.10/share ($0.11/share post-split), and announcing a new $3.5B buyback program. The new buyback will kick in once the $514M remaining on an existing $2B authorization is used up.
  • The dividend hike leaves MasterCard sporting a 0.57% yield. MasterCard's next dividend will be paid on Feb. 10 to shareholders on record as of Jan. 9.
  • Between its new and old buyback funds, the company is capable of repurchasing 4.3% of outstanding shares at current levels.
  • Shares +1.9% AH.
Comments (26)
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    Boooooo. If PCLN and GOOG can do, MA can do the $1000 share price as well.
    10 Dec 2013, 04:53 PM Reply Like
  • ChuckXX
    , contributor
    Comments (956) | Send Message
     
    If you had bought enough of this baby at the IPO back in March of 2006 you would be on your Plantation today instead of scooping snow. I know, woulda, coulda, shoulda.
    10 Dec 2013, 05:32 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    Yup..... a 20 bagger at least.
    10 Dec 2013, 07:57 PM Reply Like
  • rwkoch
    , contributor
    Comments (18) | Send Message
     
    I bought 500 at 47.50 in 2006. Unfortunately, I listened to my financial advisor and sold 300 of those shares a few years ago. I still have 200, soon to be 2000, and am happy to have invested in this stock. Lucky for sure.
    10 Dec 2013, 10:41 PM Reply Like
  • User 509088
    , contributor
    Comments (872) | Send Message
     
    chuck, yer a mean guy! you're right, but...
    10 Dec 2013, 05:38 PM Reply Like
  • tomlos
    , contributor
    Comments (1072) | Send Message
     
    Never a bad time to get into MA, they along with the others in their space have a very very bright future ahead of them.
    10 Dec 2013, 05:44 PM Reply Like
  • Adam Smith, Jr.
    , contributor
    Comments (8) | Send Message
     
    A 10 for 1 split for MA. Is this a warning sign that a top may be approaching? Reminds me of when Xerox had a 5 for 1 split back in the days of the "Nifty Fifty."
    10 Dec 2013, 06:21 PM Reply Like
  • phildevoyd
    , contributor
    Comments (91) | Send Message
     
    Agreed. On the other hand, Baidu's 6-1 split in 2010 didn't hurt any. But that was early in the bull market.
    10 Dec 2013, 06:52 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    Xerox and MA's business model couldn't have less in common.

     

    Here's a hint: Don't use a stock split to predict the downfall of a company
    10 Dec 2013, 08:00 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1031) | Send Message
     
    Now with MA outperforming V over the past few months, it's a question as to which one is currently a better buy. These are traditional "toll booth" stocks that will ride the continued global transition from cash.
    10 Dec 2013, 06:34 PM Reply Like
  • Philip Saglimbeni
    , contributor
    Comments (483) | Send Message
     
    The best stock just got better! I could have done without the split, prefer the high price and low share count. Long since $250, never thought I'd see a price below that again ; )

     

    Should print $800 this week, maybe tomrw

     

    Phil
    10 Dec 2013, 07:22 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    Yup. Right there with you. Made my first purchase at $190, then $250, and most recently $395 last year.
    10 Dec 2013, 08:00 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    Good call. $800 ah now
    10 Dec 2013, 08:19 PM Reply Like
  • Philip Saglimbeni
    , contributor
    Comments (483) | Send Message
     
    chop,

     

    yep, just saw it, we both like this one a lot, congrats. I would have really enjoyed that eventual $1,000 print though.
    10 Dec 2013, 08:24 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1031) | Send Message
     
    chopchop0 - I'm more sluggish than you and bought at $405 last year. :-)

     

    With the aftermarket price at $800, what's your view of current fair value? At nearly 26x forward EPS, I think multiple expansion has largely played out.
    10 Dec 2013, 08:30 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    "With the aftermarket price at $800, what's your view of current fair value? At nearly 26x forward EPS, I think multiple expansion has largely played out."

     

    People pay higher valuations than that for not nearly as growthy or "moaty" businesses. I hate to buy things at 52-week highs, but MA has been teasing ever since the selloff earlier this year. I don't believe it's over for this stock. Remember 85% of the world's transactions still occur in cash. There is so much of a runway to growth there.
    10 Dec 2013, 11:34 PM Reply Like
  • ED INCOME
    , contributor
    Comment (1) | Send Message
     
    would anyone recommend to buy before the split, expecting it to pop on the day of the 10 for 1 split? Did this for KO and it semi-paid off.
    10 Dec 2013, 07:59 PM Reply Like
  • ozcutty
    , contributor
    Comments (321) | Send Message
     
    Nice, i'm predicting $900, now $90 as a target for next year.
    10 Dec 2013, 08:37 PM Reply Like
  • civ-e
    , contributor
    Comments (283) | Send Message
     
    what accounts for the rather large divergence in the performance of V vs. MA lately?
    10 Dec 2013, 09:13 PM Reply Like
  • Philip Saglimbeni
    , contributor
    Comments (483) | Send Message
     
    mostly a court overturning Fed Reserve's $0.21 cap on fees, looking for 12 cents instead, would hurt V more than MA if I remember correctly, was the first large divergence day, V down 10% MA up 4% that day

     

    http://cnnmon.ie/1hLxzAh
    10 Dec 2013, 09:22 PM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    correct. V much more exposed to the debit market and thus that negative ruling.
    10 Dec 2013, 11:40 PM Reply Like
  • civ-e
    , contributor
    Comments (283) | Send Message
     
    the two companies' market caps are not that far apart anymore, especially if MA's goes up tomorrow as expected.
    11 Dec 2013, 01:32 AM Reply Like
  • chopchop0
    , contributor
    Comments (2994) | Send Message
     
    "the two companies' market caps are not that far apart anymore, especially if MA's goes up tomorrow as expected"

     

    Even if it goes up, it's still around a $32 billion difference.
    11 Dec 2013, 06:35 AM Reply Like
  • ConservativeOutperformer
    , contributor
    Comments (530) | Send Message
     
    Beast
    10 Dec 2013, 09:58 PM Reply Like
  • prgette
    , contributor
    Comments (94) | Send Message
     
    FAST Graphs shows MA to be at a very high valuation; V is pretty much fairly valued.
    11 Dec 2013, 05:14 AM Reply Like
  • Tradevestor
    , contributor
    Comments (4013) | Send Message
     
    $MA $V A look at Mastercard's new capital return program http://seekingalpha.co...
    11 Dec 2013, 08:42 AM Reply Like
DJIA (DIA) S&P 500 (SPY)