The Basics of Visa

 

Worldwide Invest Better Day 9/25/2012

For well-nigh 20 years now, The Motley Fool has been here to help you invest better and smarter, using spot-on analysis and a razor-sharp wit. To celebrate Worldwide Invest Better Day on Sept. 25, we're taking some time to get back to the basics -- of investing, that is. In that spirit, I've rounded up some sweet financial-sector stocks that have been showing some real sparkle and promise lately.

Without further ado, let me introduce you to the focus of this particular article: powerhouse credit card issuer Visa (NYSE: V  ) .

A king among cards
From its debut as a Bank of America (NYSE: BAC  ) product called BankAmericard back in 1958, Visa, as it became known in 1976, has been a major player in the credit card arena. The rising popularity of the debit card caught the company's attention in 1995, when it launched its first card of that type; today, it offers a wide array of prepaid debit card products. In 2000, Visa boasted having reached 1 billion branded cards. Visa went public in 2008, and today, with a market cap of $104 billion, the company is twice the size of its closest competitor, MasterCard (NYSE: MA  ) .

Visa turned in some very nice Q2 numbers recently, showing off a 10% increase in revenue from last year, as well as an impressive 25% rise in net income. For the past few years, this consistent performer has gained at least 20% each year in the earnings department. Visa also paid out a nice $0.22-per-share dividend recently, an amount that hasn't changed since last fall. It's worth noting, though, that the company has raised its payout every few months since 2008, a good sign for investors who like some extra income when they invest.

Visa has been busy moving into mobile payments, in addition to all of its other services. Recently, it joined forces with MasterCard, fellow card issuers American Express (NYSE: AXP  ) , Discover Financial Services (NYSE: DFS  ) , and Capital One Financial to form the Mobile Payments Committee, a group charged with educating the public about digital payment options, an area in which Visa excels. Indeed, a recent report from Javelin Research notes that Visa is the No. 1 consumer choice in the mobile-wallet space, followed closely by eBay's PayPal.

Visa looks to the future
Visa, with all of its payment services, is well situated for future growth. Consumers love their credit and debit cards, and the company is already positioning itself as a player in the nascent mobile-payments space. In an economy that is more than two-thirds consumer driven, providing the methods for people to pay for everyday purchases is a pretty sweet business to be in.

I'll be covering other great stocks over the next couple of weeks, as will my fellow Fools, in celebration of Worldwide Invest Better Day. Check out our special website set up especially for this investing extravaganza at InvestBetterDay.com.  There will be lots of great articles posted there through Sept. 25, all with a particularly informative take on various facets of investing. We'd love to have you on board, too -- so check out the site and prepare to be informed and amused by the never-dull world of investing!

Fool contributor Amanda Alix owns no shares in the companies mentioned above. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of eBay and Visa and creating a write covered strangle position in American Express. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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