{"id":167731,"date":"2020-05-13T13:39:33","date_gmt":"2020-05-13T13:39:33","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=167731"},"modified":"2020-05-13T13:39:33","modified_gmt":"2020-05-13T13:39:33","slug":"online-payment-stocks","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/online-payment-stocks\/","title":{"rendered":"Top 5 Online Payment Stocks: Going Beyond the Credit Card Stocks"},"content":{"rendered":"<p lang=\"en-CA\">If you&#8217;ve been shopping from home, you&#8217;re paying online with a credit card using some product related to some of the best online payment stocks. If you&#8217;ve been buying groceries at a store during this lockdown, you&#8217;re likely paying with plastic or even your smartphone.<\/p>\n<p lang=\"en-CA\">We live in a time of filthy lucre, literally. Some shopkeepers view cash as dirty (though this is scientifically dubious) and refuse to handle it. As lockdowns around the world, this attitude will gradually ease, but for now plastic and payment apps rule.<\/p>\n<p lang=\"en-CA\">So, let&#8217;s first try to go beyond the credit card stocks (Mastercard, Visa and Amex) and look at some top payment stocks.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/online-payment-stocks\/#Online_Payment_Stock_1_PayPal_PYPL-Q\" >Online Payment Stock #1 : PayPal (PYPL-Q)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/online-payment-stocks\/#Online_Payment_Stock_2_Square_SQ-N\" >Online Payment Stock #2 : Square (SQ-N)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/online-payment-stocks\/#Online_Payment_Stock_3_American_Express_AXP-N\" >Online Payment Stock #3 : American Express (AXP-N)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/stockchase.com\/discover\/online-payment-stocks\/#Online_Payment_Stock_4_Mastercard_MA-N\" >Online Payment Stock #4 : Mastercard (MA-N)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/stockchase.com\/discover\/online-payment-stocks\/#Online_Payment_Stock_5_Visa_V-N\" >Online Payment Stock #5 : Visa (V-N)<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Online_Payment_Stock_1_PayPal_PYPL-Q\"><\/span>Online Payment Stock #1 : PayPal (PYPL-Q)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-167884\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/05\/PYPL-Q-1-760x254.png\" alt=\"PYPL-Q stock chart\" width=\"860\" \/><\/p>\n<p>The granddaddy of e-payments has been riding the lockdown with a year-to-date climb of 33% (as of the May 11 close). The Nasdaq has been the strongest American index, but that is up only 2.45% YTD.<\/p>\n<p><span lang=\"en-CA\">Long known as the payment system for <a href=\"https:\/\/stockchase.com\/EBAY-Q\">eBay<\/a>, <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a> and its current CEO won&#8217;t rest on his laurels. Instead, he has plans to actively expand the company, as detailed in his recent <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><span lang=\"en-CA\"><a href=\"https:\/\/investor.paypal-corp.com\/events\/event-details\/paypals-q1-2019-earnings-call\" target=\"_blank\" rel=\"noopener\">Q1 call<\/a>:<\/span><\/u><\/span><\/span><span lang=\"en-CA\"> increasing in-store payments, integrating with Honey (the coupon app that <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a> bought last year), and bossting more peer-to-peer payments. <\/span><\/p>\n<p><span lang=\"en-CA\">The Honey deal was sweet, offering synergies that should be realized over time. <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a> itself boasts 15% revenue growth YOY, and a one-year return above 30%, but it trades at a high 65x earnings and an astronomical price-to-book of 10,619x. <\/span><\/p>\n<p><span lang=\"en-CA\">Can the good times continue? Probably, though not as this nosebleed rate. For income investors, though, don&#8217;t look at <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a> which pays no dividend.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Online_Payment_Stock_2_Square_SQ-N\"><\/span>Online Payment Stock #2 : Square (SQ-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-167883\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/05\/SQ-N-1-760x254.png\" alt=\"SQ-N stock chart\" width=\"860\" \/><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a> has been overshadowing <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a>, gaining more analyst coverage from the likes of <a href=\"https:\/\/stockchase.com\/expert\/view\/1253\/Rick-Stuchberry\">Rick Stuchberry<\/a> who recently predicted 40% growth for the payments app, based on rising demand and a solid balance sheet. <\/span><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/expert\/view\/1417\/Kim-Bolton\">Kim Bolton<\/a>, who specializes in tech stocks, endorses <a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a> for its generous 80% margins derived from ongoing fees and in providing financing which returns 40%. YTD, <a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a> has also outpaced the Nasdaq, rising nearly 20%, but lags <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a>. <\/span><\/p>\n<p><span lang=\"en-CA\">Also, <a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a> trades at an even higher PE than <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a>, at 113x. <a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a>&#8216;s recent <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/finance.yahoo.com\/news\/square-sq-reports-q1-loss-212509594.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">Q1 reported<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> revenues rose 44% annually to $1.38 million, beating the street by $80 million. However, its loss increased from $38 million to $106 million, and the company didn&#8217;t post guidance for the rest of the year. <\/span><\/p>\n<p><span lang=\"en-CA\">One concern is that half of its customers are small merchants who generate less than $125,000 in gross payment volume; they are struggling to stay in business. Compared to <a href=\"https:\/\/stockchase.com\/PYPL-Q\">PayPal<\/a>, <a href=\"https:\/\/stockchase.com\/SQ-N\">Square<\/a> may be the less safer bet going forward, but you&#8217;re probably in good shape holding it, if you already own it.<\/span><\/p>\n<p>Now with the credit card leaders :<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Online_Payment_Stock_3_American_Express_AXP-N\"><\/span>Online Payment Stock #3 : American Express (AXP-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-167886\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/05\/AXP-N-1-760x254.jpg\" alt=\"AXP-N stock chart\" width=\"860\" \/><\/p>\n<p><span lang=\"en-CA\">Of the traditional credit card companies, <a href=\"https:\/\/stockchase.com\/AXP-N\">AmEx<\/a> has always trailed <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> and <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a> in use and stock appreciation, and it looks like that position continue. <\/span><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/AXP-N\">AmEx<\/a> had a rough start to the week, plunging nearly 5% on Monday. <\/span><\/p>\n<p><span lang=\"en-CA\">The virus killed a <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/finance.yahoo.com\/news\/another-big-deal-sunk-coronavirus-210547296.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">deal<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> that would have seen private equity firm Carlye Group and Singapore sovereign wealth fund GIC pull out of investing in <a href=\"https:\/\/stockchase.com\/AXP-N\">AmEx<\/a>&#8216;s Global Business Travel, a corporate travel booking service that <a href=\"https:\/\/stockchase.com\/AXP-N\">AmEx<\/a> owns 50% of. <a href=\"https:\/\/stockchase.com\/AXP-N\">AmEx<\/a> has fallen over 31% YTD and has been rangebound since the March 23 bottom, bouncing between $81 and $95. This is a trade at best, as there are are better prospects in this space. <\/span><\/p>\n<p><span lang=\"en-CA\">The stock trades at an 11x PE and pays a 1.92% dividend.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Online_Payment_Stock_4_Mastercard_MA-N\"><\/span>Online Payment Stock #4 : Mastercard (MA-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-167885\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/05\/MA-N-1-760x254.png\" alt=\"MA-N stock chart\" width=\"860\" \/><\/p>\n<p lang=\"en-CA\">The perennial battle between <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a> and <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> endures during the lockdown with both stocks withstanding the volatility of markets in the past two months.<\/p>\n<p lang=\"en-CA\">True, <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a> trails the Nasdaq, which is up YTD by 2.45% while <a href=\"https:\/\/stockchase.com\/MA-N\">MA<\/a> is down nearly 6%, but in the past month <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a> has kept pace.<\/p>\n<p lang=\"en-CA\">Never has its tap-to-pay feature been so treasured by considers and retailers alike in this non-tactile, germ-phobic shopping environment. <a href=\"https:\/\/stockchase.com\/MA-N\">MA<\/a>&#8216;s earnings beat, announced two weeks ago, beat the street despite the Covid-19 impact.<\/p>\n<p lang=\"en-CA\">Revenues rose 5% YOY and its liquid cash of $10.7 billion plus $6 billion in credit facility should service its long-term $12.5 billion debt to keep the company afloat. Their cash flow is one reason why analyst <a href=\"https:\/\/stockchase.com\/expert\/view\/1440\/Chris-Blumas\">Chris Blumas<\/a> recommends buying <a href=\"https:\/\/stockchase.com\/MA-N\">MA<\/a> on a 15% pullback. After all, the stock is trading at a high 36x earnings.<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a>&#8216;s dividend is only 0.57%, so don&#8217;t buy if you&#8217;re looking for income. Long-term, though, <a href=\"https:\/\/stockchase.com\/MA-N\">MA<\/a> is a consideration.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Online_Payment_Stock_5_Visa_V-N\"><\/span>Online Payment Stock #5 : Visa (V-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-167882\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/05\/V-N-1-760x254.jpg\" alt=\"V-N stock chart\" width=\"860\" \/><u><\/u><\/p>\n<p><span lang=\"en-CA\">Often, it&#8217;s a toss-up between <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a> and <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a>. Analysts like <a href=\"https:\/\/stockchase.com\/expert\/view\/67\/David-Baskin\">David Baskin<\/a> recommend both and saw the recent bottom as a screaming buying opportunity. <\/span><\/p>\n<p><span lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a>&#8216;s recent <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/finance.yahoo.com\/news\/visas-v-q2-earnings-beat-191007290.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">Q2 reported<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> an earnings beat, rising 9% YOY due to expanded payments volume and processed transaction, though it was partially hit by cross-border revenues (like its peers) due to the virus. <\/span><\/p>\n<p><span lang=\"en-CA\">In other words, <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> is enduring this pandemic and the future remains positive. That said, as a general note, all the payments companies will be effected by soaring unemployment as consumers watch their spending, so I wouldn&#8217;t back up the truck. <\/span><\/p>\n<p><span lang=\"en-CA\">In fact, with <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a>&#8216;s PE at 33x, nearly as high as <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a>&#8216;s, you may want to wait for a pullback. <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> also pays a paltry dividend at 0.65%, so forget income. <\/span><\/p>\n<p><span lang=\"en-CA\">However, the runway for growth will continue. Year to date, <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> is -2.3% compared to <a href=\"https:\/\/stockchase.com\/MA-N\">Mastercard<\/a>&#8216;s -5.4%. For the long-term, <a href=\"https:\/\/stockchase.com\/V-N\">Visa<\/a> is also a winner.<\/span><\/p>\n<p lang=\"en-CA\"><i>Disclosure: I own Visa shares.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&#8217;ve been shopping from home, you&#8217;re paying online with a credit card using some product related to some of the best online payment stocks. If you&#8217;ve been buying groceries at a store during this lockdown, you&#8217;re likely paying with [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":167881,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-167731","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/167731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=167731"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/167731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/167881"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=167731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=167731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=167731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}