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Visa’s Dividends: Growth Trajectory Is Expected to Continue

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Rising dividends

In fiscal 2016, Visa (V) declared dividends of $0.56 per share. Wall Street analysts expect Visa to declare dividends of $0.66 per share for fiscal 2017. The expected dividends would amount to a 17.9% increase—compared to its dividends in fiscal 2016.

Visa attracted investors’ attention after posting strong revenue numbers in fiscal 2Q17. It declared a share repurchase program worth $5 billion. In fiscal 2Q17, Visa used $1.7 billion in cash to repurchase 19.1 million shares at $88.51 per share. From October 2016 to March 2017, Visa used $3.5 billion in cash to repurchase 41.4 million shares at $83.81 per share.

Visa’s management declared a dividend of $0.165 per share in April 2017. The dividend was paid on June 6, 2017.

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Competitors’ analysis

Visa has a higher payout ratio than its consumer financial peers (XLF). Visa’s payout ratio stood at 30.4%. Its competitors have the following payout ratios:

  • American Express (AXP) – 22.6%
  • Discover Financial Services (DFS) – 20.2%
  • MasterCard (MA) – 21.4%

In the next part, we’ll discuss Visa’s valuations.

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