Mastercard Inc: Why Warren Buffett and Other Billionaires Like MA Stock
October 12, 2016
Upside For MA Stock?
Mastercard Inc (NYSE:MA) stock has a countless number of shareholders, with some being considered part of the exclusive club of the super wealthy. The list includes the likes of Warren Buffett, Steve Cohen, and Ken Griffin. Looking into these billionaires and their history, it only made sense. That’s because Mastercard has a great past, present and future.
Future Is Fintech
Financial technology is a new emerging sector, combining technology and financial services to make things more efficient for the end user.
A lot of financial companies are moving with the times. It’s becoming harder to see people paying for their things in cash. More and more things are going electronic, and money is no exception.
Mastercard is rightly positioned to be part of this growth. Yes, this is a financial company, but there is a technology component to the business as well. For instance, the company has formed a partnership with PayPal Holdings Inc (NASDAQ:PYPL). The deal includes the option to use Mastercard through the online PayPal platform. With the booming environment of online shopping, Mastercard is increasing the speed and efficiency of checkout methods. (Source: “PayPal and MasterCard Expand Partnership to Benefit Consumers, Merchants and Financial Institutions,” Mastercard Inc, September 6, 2016.)
Partnerships are great to have for brainstorm new ideas and growing the business, but nothing beats an acquisition. Ninety-two percent of payment systems company VocaLink Holding Limited was purchased by Mastercard for under $1.0 billion dollars, expanding their global footprint. In 2015, VocaLink processed more than 11 billion transactions and reported revenue of £182 million. (Source : “MasterCard Announces Acquisition of VocaLink,” Mastercard Inc, July 21, 2016.)
Dividend and Performance
Mastercard’s current dividend paid is $0.76, paid on an annual basis. MA stock currently sits at $101.44, while the yield return is 0.74%. If you’re wondering if it is worth it for a dividend of less than one percent, the yield has seen 316% growth over the past three years. This calculation factors in the stock split of 10:1 that occurred in January, 2014.
The return that has been seen over the last 10 years has been 1,457%, for Mastercard stock. This is why we tend to keep hearing the names of Warren Buffett, Steve Cohen, and Ken Griffin tied to MA stock.
Final Thoughts of MA Stock
Mastercard Inc is focused on returning cash back to its shareholders, as well as growing the top and bottom line of the balance sheet by forming partnerships and making acquisitions. We always hear from our parents, that we must be careful of the company we keep. In that case, you might want to consider MA stock, considering who else owns it.
