Why MasterCard Is Poised to Keep Poppin'

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, credit card giant MasterCard (NYSE: MA  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at MasterCard and see what CAPS investors are saying about the stock right now.

MasterCard facts

Headquarters (founded)

Purchase, N.Y. (1966)

Market Cap

$72.4 billion

Industry

Data processing and outsourced services

Trailing-12-Month Revenue

$7.5 billion

Management

CEO Ajaypal Banga (since 2010)
CFO Martina Hund-Mejean (since 2007)

Return on Equity (average, past 3 years)

40.5%

Cash / Debt

$5.0 billion / $0

Dividend Yield

0.4%

Competitors

American Express
Discover Financial
Visa 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 3,452 members who have rated MasterCard believe the stock will outperform the S&P 500 going forward.   

Just yesterday, one of those bulls, fellow Fool Simon Erickson (TMFInnovator), succinctly summed up the outperform case for our community:

Incredible business that has lots of things to like:

-Their open-loop network carries lower risk and benefits from network effects. This shields MA (and V) from other competitors entering their market.
-Global macro trend moving from cash and checks to electronic payments.
-Operating margins that have steadily improved over the past five years and are now over 50%.
-No long-term debt.
-Excellent management.
-Quadrupled their dividend in the last two years and it is still less than 10% of free-cash-flow.

I've had this company on my radar for a while, but never pulled the trigger. Until now.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, MasterCard may not be your top choice.

After all, many investors are terrified about investing in big financial stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 16, 2013, at 1:31 PM, Phelanmt wrote:

    I always want to invest in MC, but when I open my wallet, I have visa, discover, and AmEx, but no MC.. so not sure they are reaching as many people as they once did or as their competitors still do

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