Mastercard Inc has Underperformed its Peers but Fundamentals are Strong

2017 is shaping up to be the year of rising interest rates and increasing profits for banks and credit card companies. But the recent performance of Mastercard Inc (MA) has underwhelmed to a degree. The stock has performed in a rather lacklustre way against its competitors in Visa Incorporated (V), Verizon Communications (VZ), Fidelity National Information Systems (FIS), et al. Currently, Mastercard’s dividend payout is 21.41% and its dividend yield is 0.74%. Compared to Mastercard’s peers, the average dividend payout is 42.04% and the dividend yield is 1.05%. For MA stock holders, these numbers are none-too-flattering. However, analysts agree that if MAs dividend score is maintained, there could be some dividends in the pipeline moving forward. Compared to its peers, Mastercard’s dividend quality score is noticeably higher. It is currently at 92 while the peer average is at 54 (data provided by CapitalCube).

Comparative Statics with Mastercard Stock

Mastercard Peers – Comparative Analysis

There are many positives to look at when considering Mastercard stock. For starters, the US division of the company is performing well relative to its peers. While earnings growth is a little disappointing, the area where MA shines is rates of return (ROR). The company’s robust profitability will certainly propel the stock moving forward. Mastercard’s capital investment is minimal. This suggests that the company is deriving tremendous profits from its core business operations.

With additional interest rate hikes in 2017, we are likely to see ongoing profitability for Mastercard. Consider that the year-on-year revenue growth of MA is 11.47 (TTM), while that of its industry peers averages out to 14.9. Where MA shines over its competitors is with earnings growth. MA has a 6.59 TTM earnings growth (year-on-year percentage), while its peers are currently falling at -10.82. These numbers simply point to optimism for MA stock and that bodes well for long-term call options for binary options traders.