Stock price when the opinion was issued
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)
Prefers Mastercard for its higher growth rate over the last 5 years. Visa sees more regulatory challenges in the US and UK, and are more exposed to debit cards which is seeing regulation pushback on those fees. MA is more exposed to European markets where the cash-to-card conversion is still going, offering growth. Both companies enjoy great margins and are layering on extra services. A slowing consumer may slow growth rates from 12% to 8-10% in revenues, a slight, but not major headwind.