3 Big Reasons to Love Mastercard (MA)

Over the last six months, Mastercard’s shares have sunk to $498.84, producing a disappointing 15.9% loss - a stark contrast to the S&P 500’s 6.2% gain. This might have investors contemplating their next move.

Following the drawdown, is now a good time to buy MA? Find out in our full research report, it’s free.

Why Are We Positive On MA?

Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

Thankfully, Mastercard’s 16.5% annualized revenue growth over the last five years was impressive. Its growth beat the average financials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Mastercard’s EPS grew at a spectacular 21.5% compounded annual growth rate over the last five years, higher than its 16.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

3. Stellar ROE Showcases Lucrative Growth Opportunities

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Mastercard has averaged an ROE of 169%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Mastercard has a strong competitive moat.

Final Judgment

These are just a few reasons why we're bullish on Mastercard. After the recent drawdown, the stock trades at 25.3× forward P/E (or $498.84 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.

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