Stock price when the opinion was issued
The Wall Street Journal reported that some retailers are looking at exploring the possibility of using stablecoins for customer purchases as an alternative to credit cards. We would not see this as a big threat, and would see the dip as a chance to buy.
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He owns Visa and owned MA a long time ago. Both are great, but he prefers Visa. Visa trades slightly cheaper in terms of valuation, and is much larger than Mastercard (Visa is bigger than all competitors combined). MA is more internationally active. Visa has a higher percentage of debit cards, which grows faster than credit cards. Visa competes well in terms of growth rates with MA, yet trades at a lower multiple, so cheaper. He likes that the debit card business is growing faster than credit cards.
Average rate of return of 20% since it went public. Does take pauses, and it looks to be taking one right now. The drop looks a bit concerning, though still in a normal trading range. If it can hold above the $330 level, it's worthy of buying on this dip. Something bad happened yesterday to cause the almost 5% drop.
But you have to be very careful. You need a trading plan, which means that if it drops below $330, you sell. Solid support at $315.
97% gross margins, and 60% operating margins. A play on global transaction volumes. Worries about stablecoins; but however people decide to pay for something, Visa will take its share. There will always be competitive threats, but its network is a backbone of payments and can't easily be replicated. Yield is 0.68%.
(Analysts’ price target is $387.33)
HD-N vs. V-N. Don’t focus on the current yield. He thinks V-N will deliver 20% dividend growth going forward. HD-N is also a high dividend grower. You need to decide which business you want. He would go with V-N because it is the largest electronic payment network in the world. They just completed the European acquisition and it should be very accretive.