Two of the most consistent, reliable, and best financial stocks over the past decades -- Visa (V 0.54%) and Moody's (MCO 3.60%) -- have struggled in recent months.
Visa, the leading payment processor, has seen its stock price dip some 8% year to date and 10% over the past 12 months. For a stock that has averaged a 16% annualized return over the past 10 years and 19% since it went public in 2008, it is a rare hiccup.
Moody's, a leading credit rating agency and financial analytics provider, is off some 12% YTD and 14% over the past year. It has also been a strong performer over the years, averaging a 17% annualized return over the past 10 years and 15% since 2008.
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Investors may want to take the opportunity to buy the dip on these stocks, as they are both poised for a comeback.
Moats and duopolies
Both Visa and Moody's are similar in that they are both long-time holdings of Warren Buffett and Berkshire Hathaway. Moody's is the sixth-largest Berkshire holding, while Visa is the 13th largest.
The reason they are so coveted by Buffett and Berkshire is because they both have wide moats and are essentially one half of a duopoly in their respective industries.
NYSE: MCO
Key Data Points
Moody's and Standard & Poor's Global are the two largest credit rating agencies, each controlling about a 40% market share.
Visa is the largest payment processor, with about a 52% market share. Combined with Mastercard, the two control about 75% of the market.
They both have wide moats, based on their market share but also on the fact that there are only a handful of players in each industry. Also, their competitive advantages are so strong, they are hard to penetrate.
Ready for a bounceback
The recent downturns for both Visa and Moody's are more based on outside forces than anything directly attributable to them.
Visa has been under fire from federal legislators. A bill, the Credit Card Competition Act, seeks to break up the Mastercard-Visa duopoly by requiring banks to offer merchants a choice of two credit networks for every purchase, including at least one outside the duopoly. It has been around for several years, but gained momentum when President Donald Trump endorsed it. It's not clear that it has the votes, and the industry is lobbying hard against it, so its passage is up in the air.
NYSE: V
Key Data Points
Otherwise, Visa has performed well. In the most recent quarter, revenue grew 15% year over year while earnings climbed 17%. Further, its outlook called for low-double-digit growth for both metrics in 2026.
Moody's stock fell after rival Standard & Poor's missed revenue estimates and had a disappointing outlook for 2026. Moody's, on the other hand, beat estimates in the December quarter with revenue up 13% year over year and earnings up 57%. Further, it guided for 10% to 14% earnings per share gains in 2026.
Some 90% of analysts recommend Visa as a buy, with a median price target that suggests 27% upside. Moody's is rated a buy by 67% of analysts, with a median price target that suggests a 30% gain. Also, Moody's is trading near its lowest valuation since 2023, while Visa is near its lowest valuation since 2025.
Both should bounce back in 2026.
