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Visa: Prospering Amid Economic Weakness

Jun. 04, 2023 12:18 AM ETVisa Inc. (V)12 Comments
I.M Investing profile picture
I.M Investing


  • Visa has been a dominant market leader for years despite growing competition.
  • The company has enjoyed double-digit growth for years due to the shift towards electronic payments.
  • Visa should benefit from the continued shift towards electronic payments and the rise in consumer spending.
Visa Plans Largest IPO In U.S. History

Justin Sullivan


Visa (NYSE:V) is the world's dominant electronic payment network, underpinned by a wide economic moat. A continued shift towards electronic payments and an increase in consumer spending should drive low double-digit revenue growth in the near future. Visa has enjoyed double-digit

This article was written by

I.M Investing profile picture
I.M Investing is a college sophomore majoring in finance. He looks for high-quality dominant businesses, buys them at an attractive valuation, and owns them to maximize returns.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (12)

No Guilt profile picture
Why is foreign travel such a boon for Visa?

Because then they are also basically a foreign currency dealer charging the 3%? Besides just processing the transaction like normal…sort of like a bonus?
The ceo comment on FedNow was completely useless lol
As a sophomore in finance, you have written an excellent precis on Visa. I think a subsequent article that tracks dividend growth and share buybacks would be useful for any newcomers to this company. This is a steady growth company, not subject to big swings in revenue or expense, growing despite its size. A discussion of regulatory requirements and compliance would be good too, as I see that as it's major threat.

Retired payments professional, V is my biggest holding by far.
ChuckXX profile picture
Very nice article & I commend you. My only thought is I truly hope you are wrong about your 5 year prediction of $285 per share. I've owned V since its IPO back in 2008 and certainly follow it closely. I too look at all the numbers. It is important to note that over the decade Visa has either acquired or partnered with literally dozens & dozens of companies thru out the world to keep them in that #1 slot regarding the payments industry. My 5 year prediction is $310. I recently at $217 added another 300 more shares. Its my #1 position.
I.M Investing profile picture
@ChuckXX Thank you for the comment, Chuck. You are right Visa has partnered with many companies to maintain its dominance in the payment industry. Personally, your 5-year prediction of $310 could be accurate because Visa has a history of beating expectations, and maybe they will continue to do so. Time will tell.
@ChuckXX what is your opinion on FedNow? Since Visa is your largest position im really curious.
ChuckXX profile picture
@Jurre123 Iam not overly concerned about FED NOW since they don't have any "Rewards Programs", BUT Iam much more concerned about this revival again by the government to make the merchants offer another 3rd party rail system such as PULSE, or NYCE. This has now been brought back again for the Upteenth time by Roger Marshall, Dick Durbin, Peter Welch, & J D Vance. Like I have said for a very long while now the biggest threat to Visa & Mastercard is not their competitors but the United States Government. This is all backed by the small business association and of course Walmart. I track this pretty closely and there are days where I just want to see all of my huge position in Visa which now sits at 2,524 shares. Eventually I will throw in the towel as it gets disgusting after a while. Thank You for letting me vent on the topic. Meant to say "sell" not see.
The article does not discuss and important issue: return of capital to shareholders. My only criticism of V management is the low dividend rate. With V's financial safety profile (very minimal debt) and FCF, the dividend should be at least double what it is now. V could very easily pay that.
I.M Investing profile picture
@The Cardinal Thank you for your comment, The Cardinal. In my article, I decided to focus on my thesis and issues that jeopardize the business as a whole. But you are right, Visa definitely has the cash to increase its dividend yield, and I also think it should do so to both retain its current investors and attract new ones. For my next article on Visa, I will make sure to discuss the return of capital to shareholders in more depth.
@The Cardinal your yield on cost is over 10% if you bought at IPO thanks to excellent dividend growth
@thatswhatshesaid YOC is a meaningless statistic
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