Mastercard Turns on the Cash Tap: Buybacks Boom, Dividends Bloom

Mastercard Incorporated MA just doubled down on rewarding shareholders, rolling out a fresh $14 billion Class A share repurchase authorization while boosting its dividend. The new buyback kicks in once the existing $12 billion program is finished, and as of Dec. 5, 2025, roughly $4.2 billion still remained under that plan.

The company also approved a 14% hike in its quarterly cash dividend to 87 cents per share from 76 cents previously. The new payout will be distributed on Feb. 9, 2026, to shareholders of record as of Jan. 9, 2026. Based on the Dec. 9 closing price of $537.55, Mastercard’s dividend yield stands at 0.65%, slightly below the industry average of 0.72%, suggesting meaningful room for future increases as earnings and cash flows scale.

The pace of capital returns has been strong. In the last reported quarter, Mastercard repurchased 5.8 million shares for $3.3 billion, and between Oct. 1 and Oct. 27, it bought back another 2.1 million shares for $1.2 billion. It also delivered $687 million in dividends during the third quarter alone. The surge in cash generation is providing the flexibility to keep funding buybacks and growing payouts without straining the balance sheet.

Over the trailing twelve months, free cash flow rose 20% to $16.3 billion. The company ended the third quarter with $10.3 billion in cash and equivalents, up 22.2% from year-end 2024. Long-term debt totaled $19 billion, a manageable level considering its earnings trajectory. With expanding operations and robust margins, Mastercard’s capacity for shareholder-focused actions will grow further.

Peers’ Shareholder-Friendly Actions

Companies like Visa Inc. V and American Express Company AXP also have strong capital deployment programs.

In fiscal fourth quarter 2025, Visa returned $6.1 billion to shareholders, including $4.9 billion in buybacks and $1.2 billion in dividends, with $24.9 billion still authorized for repurchases as of Sept. 30. American Express repurchased 7 million shares for $2.3 billion in the third quarter of 2025 and paid $600 million in dividends, distributing 82 cents per share in the period. Both companies continued prioritizing shareholder returns through sizable buybacks and steady dividend payouts.

Mastercard’s Price Performance, Valuation and Estimates

Shares of Mastercard have gained 2.1% year to date, outperforming the broader industry’s 12.6% decline.

From a valuation standpoint, Mastercard trades at a forward price-to-earnings ratio of 28.46X, higher than the industry average of 19.96X. Mastercard carries a Value Score of D.

The Zacks Consensus Estimate for Mastercard’s 2025 earnings implies a 12.6% rise year over year, followed by 15.8% growth next year.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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