Visa (V -0.23%) is by far the No. 1 payment-card brand in terms of cards in circulation, and one of the most familiar and well-recognized corporate names on this planet. 

It's also been quite a solid investment. Let's take a look at just how solid, and whether the company can continue its winning ways.

The top dog

Let's cast our imaginations back to the salad days of summer 2018, before almost anyone had heard the term "coronavirus." Exactly five years ago as of this writing, Visa stock closed at $138.15 per share. So a $10,000 outlay would have nabbed an investor 72 shares of the company, with some change left over. Now, as of mid-July 2023, that theoretical stake is worth slightly more than $17,147 in total.

That's a gain of 71%, not bad at all for a giant company that was already going like gangbusters in those long-ago days. By comparison, the benchmark S&P 500 index rose less than 58% over that half-decade stretch.

It's also impressive to look at Visa's headline numbers over that period. From fiscal 2018 until 2022, revenue improved by a meaty 42%, while net income was up 47%. An even juicier number is the company's net margin, which hovered around 50% throughout.

What makes Visa such a mighty growth engine despite its size, and what's the deal with those sky-high margins? Many companies, even those in the more lucrative corners of the economy, are lucky if they can consistently top 10%. 

Visa is essentially a very busy middleman. It's an open-loop payment card operator, meaning that its main job is to process the transactions made on its plastic. In return for this, it effectively takes a tiny slice of each transaction.

It's important to note here that Visa is not the issuer, i.e., the business lending the funds accessible through a credit card, or making a customer's bank account available with a debit card.

That usually falls to a financial institution, like your friendly neighborhood bank. There are cardies that act as both issuer and processor; these are called closed-loop operators, the most prominent example of which is American Express. 

As an open-looper, Visa is one of the top middleman businesses on the scene.

With over 2.9 billion cards in circulation worldwide as of the fourth quarter of 2022, according to figures from Statista, transaction volume is immense. In all of the company's fiscal 2022, this totaled a hard-to-imagine $11.6 trillion. Even a tiny sliver of that monster amount makes for big money. Visa's latest annual revenue tally was a dizzying $29 billion-plus.

The good fight

Meanwhile, Visa continues to improve its results like a young and hungry growth stock itching to succeed. That's because we continue to be in the midst of one of the most important transitions in global financial history, the war on cash.

Even in remote parts of the world with modest economies, consumers are jettisoning traditional paper money and coin in favor of plastic. That's a process that will continue to snowball for many years, and guess who's best positioned to capitalize on it? Correct: the ubiquitous operator whose brand name can be seen in nearly every country from Australia to Zambia -- Visa.

We can also chalk up Visa's monster growth to the rise of e-commerce. These days, consumers -- particularly in small but thriving economies -- think nothing of purchasing goods or services online from a foreign country. A transaction that would have been tough to arrange and expensive to realize in our parents' day can now be done with a few clicks of a mouse or several taps on a smartphone.

This favors the most frictionless method of payment possible: Hello, payment cards (which can be stored on a recent-model phone); hello, Visa.

Pay up for quality

This is not, alas, a cheap stock to own, either in terms of that triple-digit share price or its valuations. It's forward price-to-earnings ratio is over 24, while the five-year price/earnings-to-growth ratio stands at more than 1.5. But often we have to pay a premium for size, prominence, growth or -- in rare and happy cases -- all three.

And Visa is set to keep humming along like the hot financial machine it's been these past few years. Collectively, analysts tracking the stock are expecting 15% growth in per-share profitability this fiscal year, on the back of an 11% improvement on the top line. Growth projections for fiscal 2024 are only slightly lower.

This is a dominant company that, barring some global financial disaster, is beautifully primed to grow even more enormous. As such, in my view, it's well worth considering as a buy.