MasterCard Rises 18% in One Year on Strong Organic Growth



Growth story

MasterCard (MA) stock has risen 18% over the past one year in the midst of declining global equities and various asset classes. The company has benefited from strong operating performance with higher spending in the United States and Asia, partially offset by a strong US dollar. Analysts expect earnings per share of $0.72 in the December quarter compared to $0.86 per share in the third quarter. However, for the March 2016 quarter, analysts expect earnings per share of $0.93. They expect $3.90 per share for the full year with an implied growth rate of 18%.

MasterCard is forging partnerships with companies such as Apple (AAPL) to take advantage of increasing use of mobile phones to make payments. The company’s performance is suffering from a strong US dollar, which is expected to strengthen further after the Fed’s interest rate hike in December.

In 3Q15, MasterCard posted net income of $977 million, or $0.86 per share, beating analyst estimates of $0.88 per share. Its revenues increased by 1.6% to $2.5 billion, and expenses rose by 8.5% to $1.2 billion.

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Financial services

MasterCard is a technology company in the global payments industry. The company operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments, and businesses in more than 210 countries and territories.

MasterCard focuses on segments, including government programs such as Social Security payments, unemployment benefits, and commercial programs such as payroll, health savings accounts, and employee benefits.

Here’s how some of MasterCard’s peers in the payment processing industry fared with their respective quarterly earnings:

  • Visa (V) – missed estimates
  • American Express (AXP) – missed estimates by 5%
  • Fidelity National Information Services (FIS) – missed estimates

Together, these companies account for 2.3% of the Technology Select Sector SPDR ETF (XLK).


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