When you talk about well-known brands, MasterCard (NYSE:MA) has to figure into the discussion alongside the likes of Coca-Cola and Harley-Davidson. And though most of us probably don't own a hog and many of us may prefer Pepsi, the odds are pretty good that you have a MasterCard credit card on you right now. Whether you want to own stock in MasterCard may be a different story, however, with a pair of lawsuits hanging over the company.

Financial performance in the company's second quarter was, in my view, mixed. Revenue growth of about 10% wasn't bad, and metrics such as worldwide transaction volume, purchase volume, and gross dollar volume all rose by mid- to high-teen percentages. Moreover, while growth in the credit card business is a bit more modest in the low teens, the smaller debit card business continues to grow much more strongly.

For at least this quarter, though, those benefits didn't show up in the profits. Operating income was affected by a donation the company made, but results still declined when you adjust that out -- down 25% according to the company's methodology, and down 34% if you keep a litigation expense item in the mix.

Litigation is the big elephant in the room right now. MasterCard is facing two significant lawsuits that could deal a sizable financial impact -- one suit led by American Express (NYSE:AMX) and Morgan Stanley's (NYSE:MS) Discover; the other a merchant class action lawsuit. AmEx and Discover allege that Visa and MasterCard illegally restricted member banks from issuing cards on rival networks, while the merchants allege that the two companies used their monopoly power to force higher rates on the merchants. It's going to take years to resolve all of this litigation, and the potential costs range from the millions even if they win -- lawyers don't work cheap, after all -- to the billions if they lose.

And that's not the only threat. Now that MasterCard is no longer owned by its member banks, I don't think those banks will feel any compunction about squeezing MasterCard for better terms. Other companies, including Visa, First Data (NYSE:FDC), Global Payments (NYSE:GPN), and Fiserv, can do much of what MasterCard offers, and that's a potential threat to margins. Moreover, MasterCard may be pressured into giving better terms to big bank customers to keep business away from rival brands, as has seemingly already happened with Washington Mutual (NYSE:WM) and Bank of America (NYSE:BAC).

MasterCard does look like a value, but not exactly the sort of ignored, low-risk, 80-cents-for-a-dollar type of value that I really love. There's real risk here. So potential MasterCard investors have to prepare themselves for a long haul, with occasional potholes in the road.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).