Many fintech stocks have been hammered over the past year. However, in this clip from "Ask Us Anything" on Motley Fool Live, recorded on June 3, Fool.com contributor Dan Caplinger explains how Mastercard (MA -0.13%) and Visa (V 0.61%) have bucked the trend and performed quite well in 2022.
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Dan Caplinger: As I have looked at both of these stocks, I have always gravitated toward Mastercard. The reason for that is that throughout the 20 teens when I was really paying attention, there was a huge move toward globalization. I've always felt like Mastercard had a bit of an advantage when it came to international cards. It's not like Visa, isn't available overseas, but Mastercard has always been very diligent about emphasizing its international scope.
Because of that, it's something that works well with my idea that we should be encouraging globalization. The question, what's the better investment now? Well, now we're in this position where maybe we're deglobalizing, certainly, we're seeing supply chain issues, travel issues. Some of them are pandemic-related and therefore will probably go away, but we're seeing geopolitical problems that are also potential barriers to continued globalization.
You also have this sense of, we've discovered the vulnerabilities of being too reliant on international partners. You're seeing more of this nationalistic backlash and I think that can come into the economy. If it does, then it may be a situation where Visa is, I'm not going to call it emphasis on the domestic side because everybody wants the global market, but I just feel like it may be a headwind for Mastercard going forward.
Matt, before you leave, I just wanted to point out one of the fascinating things about the chart, you had the chart for the long term up there, but I looked at a stock chart it's the same stock chart but over the past year and year to date. The thing that amazes me about both Visa and Mastercard is they're outperforming the S&P in 2022 by a pretty significant amount and they're only down a little bit over the past year.
When you compare that to all the fintech disruptors that have taken huge hits. It's fascinating to me just how well both Visa and Mastercard have defended themselves against these disruptive influences and convinced their investors that yeah, there going to be fine. Sure these other companies are trying to do new things, but in the end, shareholders of Visa and Mastercard, you don't have anything to worry about and that message seems to be working well with everybody.
