Mastercard (MA +0.14%) and Visa (V +0.21%) do a large amount of business internationally. But, in this video clip from "Ask Us Anything" on Motley Fool Live, recorded on June 3, Fool.com contributors Matt Frankel, Dan Caplinger, and Nick Rossolillo look at recent data that shows Mastercard with an overseas lead, but by how much?
Matt Frankel: So, Dan mentioned Mastercard's international emphasis. This is MasterCard's payment volume in the first quarter. Not only is about a little over 2/3 of their volume international, but that's the faster-growing part of the business, 19% versus 14%. For Visa, if you look at the bottom left, right there, international is just over half of their payment volume.
You're absolutely correct that Mastercard definitely places more emphasis on overseas versus domestic. But you said that both of these companies want to rule the world payments volume-wise, but Mastercard seems to be definitely the more international focus of the two, Nick what are your thoughts?
Dan Caplinger: Just note real quick, Matt that those first-quarter numbers for Mastercard, I think do include at least a month or so of disruption from Russia. Those growth rates were even hit internationally or understated compared to where historically they've been.
Frankel: You're right, in the first-quarter data related to sanctioned Russian banks was not reported to us so it's not included, Nick.
Nicholas Rossolillo: I own both, I haven't tried to pick one over the other. I will say Visa was actually the first of the two that I owned and it's actually one of the first individual stocks I ever purchased at the IPO back in 2008, just after the IPO in 2008.
Between the two though, I decided to add Mastercard for this reason here. Mastercard, a slightly smaller company. Who's counting a few billion dollars in annual revenue when you're this big. But the operating margin, I always have felt like Mastercard, if they could catch up on operating margin, first of all, those are mind-boggling figures.
Operating profit margins of 55% for Mastercard, 67% for Visa, but if Mastercard could narrow this gap a little bit as it grows, that's an additional factor that could help push the stock higher. That hasn't really happened, but I don't know. I've always felt like the smaller player Mastercard maybe might have a little more growth in it over the long term for that reason.
