Over the past decade, the S&P 500 and the Nasdaq Composite Index, two of the most widely followed stock market indexes, have produced total returns of 221% and 304%, respectively. These are outstanding gains for investors and certainly demonstrate a stretch of better performance than the broader market's usual historical averages.

But anyone who purchased shares in Visa (V -1.09%) 10 years ago, in February 2013, is now sitting on a return of 459% (as of this writing). This means a $1,000 investment in this top fintech stock would be worth $5,590 today. It's hard to beat this type of gain in the stock market.

Let's take a closer look at Visa, arguably one of the best businesses in the world.

A history of success

Producing such a stellar investment return as the one Visa has posted in the past 10 years can't happen without some strong financial performance. Between fiscal 2012 and fiscal 2022, net revenue went from $10.4 billion to $29.3 billion, good for a compound annual growth rate (CAGR) of 10.9%. What's more, Visa is incredibly profitable: Net income in fiscal 2012 totaled $2.1 billion. In the latest fiscal year, the bottom line came in at $15.2 billion, a 624% rise over the decade-long stretch.

Since Visa takes a cut of every transaction that happens on its payments network, the more activity there is, the better. In the most recent fiscal quarter (Q1 2023, ended Dec. 31), Visa processed a whopping $3 trillion in payments volume, almost evenly split between the U.S. and international markets. This was up 7% year over year.

What's more, the number of processed transactions was up 10% compared to Q1 2022. During a time of heightened economic uncertainty, elevated inflation, and rising interest rates, Visa's continued network growth is impressive. And it shows how the business is something of an inflation hedge.

One defining characteristic of Visa's business model is just how well it scales. Handling incremental transactions bears essentially zero cost, and this plays out in the numbers. The company's operating margin went from 59.9% in fiscal 2012 to 67.4% last fiscal year. And Visa carries a ridiculous net profit margin of 51.7%.

Unsurprisingly, this favorable situation results in the generation of lots of free cash flow (FCF). During the latest fiscal quarter, capital expenditures of $249 million accounted for just 3% of the $7.9 billion in revenue. And Visa was able to produce $3.9 billion of FCF. This gives the business plenty of leeway to continue returning capital to shareholders via dividends and buybacks.

Based on the company's past fundamental performance, it's not hard to see why the share price has soared.

A strong growth outlook

With its successful operating history and resulting strong stock performance, it's no surprise that Visa's stock trades at a price-to-earnings (P/E) ratio of 31 today. Not only is this lower than the stock's trailing 5- and 10-year average valuations, but it is also cheaper than rival Mastercard's (NYSE: MA) current P/E of 35. Nonetheless, it still might seem expensive for investors, especially when the S&P 500 trades at a P/E of 18 today.

But it's worth highlighting just how big an opportunity Visa still has in front of it. The estimated total market for payment flows is a staggering $255 trillion globally, meaning the company's trailing-12-month volume of $11.7 trillion accounts for a tiny 4.6% share. Plus, a recent Gallup survey found that 64% of Americans believe they will see the U.S. become a cashless society in their lifetimes. Visa can certainly continue to spearhead that trend in the years ahead.

According to Wall Street consensus analyst estimates, Visa is expected to increase its revenue at a CAGR of 11.2% between fiscal 2022 and fiscal 2027, with EPS rising at a CAGR of 13.5% during the same time. That's solid growth that shareholders can get optimistic about.

Visa's historical performance is nothing short of spectacular. While the future likely won't mimic the past, this stock should be on every investor's radar.