Getting rich over time can be as simple as picking major players in industries with growth catalysts and holding on for the long run.
The share of U.S. e-commerce sales to total retail sales has doubled from 6.1% in 2013 to 12.9% in 2021. And with this expected to more than double to 30% by 2030, it's reasonable to believe that cash will be further displaced as a payment method. This is why Boston Consulting Group anticipates that the global payments industry will nearly double from $1.5 trillion in 2021 to $2.9 trillion by 2030. Here are two fintech stocks that could turn $200,000 into $1 million over the next 10 years -- or quintuple whatever amount you may have available to invest today by 2032.
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1. Visa
With more than 3.9 billion debit or credit cards issued around the world as of Dec. 31, Visa (V -0.59%) is the largest publicly traded payments processor in the world.
Through the first half of its current fiscal year, set to end in September, the company's net revenue advanced 24.8% higher over the year-ago period to $14.2 billion. This was made possible by momentum throughout the following three categories for Visa: payments volume, cross-border volume total, and processed transactions.
The reopening of borders helped travel to continue its recovery in the first half of the year. This led to double-digit growth in the company's cross-border volume total, which is defined as payments where the issuing country is different from the merchant country. And it also resulted in double-digit payments volume (the dollar amount of transactions that Visa's networks processed) and processed transactions growth (the total number of transactions handled by Visa's infrastructure) through the first half of the fiscal year.
The company's non-GAAP (adjusted) diluted earnings per share (EPS) rose 26.4% higher year over year to $3.54 in the first half of the year. A 50-basis-point decline in its net margin to 53.4% through the first half of the fiscal year was more than offset by a 2.1% decline in its diluted share outstanding to 2.2 billion.
Thanks to the aforementioned shift from cash to other payment methods, analysts project that Visa will deliver 18.1% annual earnings growth over the next five years. Assuming a stable valuation and 16% annual earnings growth over the next 10 years, Visa would turn a $100,000 investment into over $440,000 by 2032.
2. Mastercard
Mastercard (MA 0.15%) had 3 billion debit and credit cards in circulation as of Dec. 31. This positions it as the second-biggest publicly traded payments processing company after Visa.
Similar to Visa, Mastercard posted double-digit growth throughout its business in the first quarter of its fiscal year, which will conclude in December. This is because Mastercard noted that cross-border travel came in above 2019 levels in the first quarter for the first time since the COVID-19 pandemic began. As a result of its strong across-the-board performance, Mastercard's net revenue surged 24.4% year over year to $5.2 billion for the first quarter. A spike in Mastercard's net margin and decline in its diluted share count allowed adjusted diluted EPS to soar 58.6% over the year-ago period to $2.76 in the first quarter.
And analysts are predicting that Mastercard's scale in a promising industry will translate into robust earnings growth of 23.3% annually over the next five years. Factoring in 19% annual earnings growth and a steady valuation over the next decade, Mastercard would parlay a $100,000 initial investment into nearly $570,000 by 2032.
