In this segment from Motley Fool Money, the team reflects on the latest quarterly results from Visa (NYSE:V) and the broad tailwinds that the company is poised to enjoy along with its rival, Mastercard (NYSE:MA). Here is why both companies are worth considering for your portfolio.
A full transcript follows the video.
This video was recorded on April 21, 2017.
Chris Hill: Second quarter profits for Visa rose 27%, that was higher than Wall Street was expecting. So was Visa's revenue. Probably no surprise, Jason, that we've got Visa's stock hitting a new high on Friday.
Jason Moser: Sure. We often get the question, which stocks should I own, Visa or MasterCard? And Chris, my answer is yes. I think you should just own both, because honestly, there's no reason not to. These are two businesses that are playing into one of the biggest secular trends out there today as more and more economies go cashless. This is something where the overwhelming majority of the world is still not cashless. So, this is a trend I think is going to play out for a while to come. Visa doing a great job, with the payments volume up 37% from a year ago, $1.7 trillion of volume in that quarter. That's just amazing. Transactions were up 12%, inclusive of Visa Europe. They just brought in Visa Europe into the business, so now they're one company focusing on taking over the world, so to speak. And taking over the world is probably a pretty reasonable way to look at it, because there's more than three billion Visa-branded cards out there in the world today, more than 44 million merchant locations. These guys are doing everything right. Again, I really do mean it when I say there's no reason why you shouldn't own Visa and MasterCard, because they are really two very good businesses that have done really well for shareholders over the past decade and beyond.
David Kretzmann: Yeah, it's tough for me to see how visa and MasterCard get disrupted any time soon, and the reason I really like these businesses, I think part of the reason they have such incredible, unheard of margins compared to a lot of other companies and industries is that they will succeed regardless of what platform you're using, whether it's Alipay from Alibaba, WeChat, PayPal, you're still using the credit cards, and they're still processing those transactions. They're just in such a powerful position, such an incredible network that I love the position they're in over the long term.
Chris Hill has no position in any stocks mentioned. David Kretzmann owns shares of Mastercard. Jason Moser has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Mastercard, PayPal Holdings, and Visa. The Motley Fool has a disclosure policy.
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