Stock Entry Point Article​

Mastercard Incorporated – Credit Card Stocks 2020

Mastercard and Visa are two of the largest credit card companies in the world. Mastercard, in 2019, processed close to $4.8 trillion worth of transactions. It was the second-largest payment processor in the world with a network that spans 200 countries and processes transactions in more than 150 currencies. Investors looking to participate in the payments business can consider Mastercard. It is somewhat of a tollbooth business in the payments space. The company earns revenue regardless of whether its users conduct transactions via mobile, debit, or credit cards.

Top-Notch Management

Mastercard has been marshaled by industry veteran Ajay Banga. Ajay has been the CEO of Mastercard since 2010. He previously had experience at Citibank where he led the company’s Asia-Pacific operations. In February 2020, Ajay Banga announced his decision to step down as CEO by the end of 2020. His replacement will be Michael Miebach, another experienced leader who has been with Mastercard for 10 years and currently fills the role of chief product officer. Michael has had leadership roles with Mastercard in multiple geographic locations. So, the international business of Mastercard may continue to sustain a strong growth rate. Meanwhile, Ajay Banga will remain as the chairman of Mastercard.

Want To Buy Credit Card Stocks? But Which Ones?

Mastercard is clearly a top credit card business. Its growth rate demonstrates its dominance. Its revenue has gone from $9.6 billion in 2015 to $16.8 billion in 2019. Net income has grown from $3.8 billion in 2015 to $8.1 billion in 2019. The stock has also performed well, going from $94 in December 2015 to $340 in December 2020.

Visa is the other obvious comparable. Its revenue has grown from $13.8 billion in 2015 to $21.8 billion in 2020. Net income, meanwhile, has grown from $6.3 billion in 2015 to $10.8 billion in 2020. The stock has grown from around $76 in December 2015 to $212 in December 2020.

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