With consistent double-digit revenue growth and an adjusted operating margin of 58% in the first quarter, Mastercard (MA -0.07%) has proven to be a superb and extremely profitable business. Along with Visa, it dominates the industry for card transactions. 

If you'd invested $1,000 in Mastercard's stock 10 years ago in June 2013, you'd be sitting on a position worth about $6,500 right now. That's equivalent to an outstanding investment return of 550%. Investors who put their money in an index fund that tracked either the S&P 500 or the Nasdaq Composite Index wouldn't have done anywhere near as well. 

Can Mastercard post a similar type of performance in the years ahead? Here's what investors should know about this card payments juggernaut. 

Travel demand is bouncing back 

Mastercard's latest financial results beat Wall Street analyst estimates for both revenue and earnings. That's definitely something that shareholders like to see, because if a business continuously strings together a solid record of exceeding expectations, the stock price performance should follow. But there were some key underlying trends that investors should pay close attention to. 

During the depths of the pandemic, travel screeched to a halt. But with economies reopening and travel demand soaring as consumers get back to exploring the world, Mastercard has benefited. Cross-border payments volume, which is when a cardholder's issuing bank is in a different country than the merchant's bank, jumped 35% in the latest three-month period.  

And because it has first-hand data on spending activity, Mastercard's position gives it a unique vantage point on the general state of the consumer. "Consumer spending has remained remarkably resilient... despite continued economic uncertainty," Chief Executive Officer Michael Miebach said on the Q1 2023 earnings call. 

At a challenging time for many businesses, which are struggling with inflationary pressures on both the cost side as well as the demand side, it's really encouraging to see that Mastercard is reporting how strong consumer spending seems to be. Moreover, if a recession does happen, investors can rest assured that Mastercard should do just fine. During the Great Recession about 15 years ago, revenue increased in both 2009 and 2010. 

Endorsed by Warren Buffett 

Thanks to an incredible track record that spans decades, many consider Warren Buffett to be the greatest investor ever. So looking at what Berkshire Hathaway owns in its massive portfolio is probably a smart idea for the average retail investor when deciding what stocks to consider buying. 

As of March 31, the conglomerate owned about $1.5 billion worth of Mastercard shares. While this equals less than a half-percent of the company's outstanding stock, it makes Mastercard a top-20 holding for Buffett. 

He probably likes the business because of the presence of an economic moat. Mastercard's 3.2 billion cards in circulation and 30 million merchant locations create powerful network effects that make its competitive position almost unassailable. 

The expensive valuation might be justified 

Mastercard's historical share price outperformance has made the stock relatively expensive. As of this writing, shares carry a price-to-earnings (P/E) multiple of 37, much higher than the valuation several months ago in October of last year. It also trades at a premium to rival Visa's P/E ratio of less than 31. That could turn some investors away. 

But Mastercard's proven resilience in uncertain economic times, coupled with the fact that Buffett owns a piece of the business, might be good enough reasons to justify owning the stock, despite the steep valuation. And with there still being a long expansionary runway in the decade ahead, particularly as cashless payments become even more prevalent around the world, Mastercard is in a good position to keep growing. 

The business is projected to increase its diluted earnings per share at a compound annual rate of 15.7% between 2022 and 2027, according to Wall Street analyst forecasts. Should that impressive outlook come to fruition, Mastercard's stock will do just fine for investors.