Valuation And Analysis Of Visa And Mastercard

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Includes: MA, V
by: CRG Research

Mastercard Inc. (NYSE:MA) and Visa, Inc. (NYSE:V) released financial statements today. After some analysis and valuations, we found that both firms are in excellent financial condition. However, valuations may be nearing a peak.

Mastercard - BUY

  • High growth enterprise and investors are paying a premium for growth.
  • Valuations may be near an intermediate-term peak.
  • Revenue-share and book value-share growth is outstanding.
  • On a price-sales basis the firm is 25 percent more expensive Year/Year.
  • On a price-book value basis the firm is 20 percent more expensive Y/Y.
  • Credit, charge and debit programs worldwide revenue is increasing.
  • Solvency and liquidity ratios shouldn't worry investors.
  • Shares are trading above the rising 50-day simple moving average.
  • Common equity shares are up 22.4 percent year-to-date.
  • Conclusion: The long-term prospects are excellent given the business model and growth; valuations may be near peaks and investors should be cautious of an intermediate decline in share price.

(click charts to enlarge)

Visa - BUY

  • High growth enterprise and investors are paying a premium for growth.
  • Valuations may be near an intermediate-term peak.
  • Revenue-share and book value-share growth is outstanding.
  • Price-sales increased about 37 percent Y/Y.
  • Price-book value increased about 43 percent Y/Y.
  • Solvency and liquidity ratios shouldn't worry investors.
  • Shares are trading above the rising 50-day simple moving average.
  • Common equity shares are up 21.5 percent year-to-date.
  • Conclusion: The long-term prospects are excellent given the business model and growth; valuations may be near peaks and investors should be cautious of an intermediate decline in share price.

(click charts to enlarge)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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