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Analysis of Visa (#V) – an American multinational company providing payment services.

Analysis of Visa (#V) – an American multinational company providing payment services.

10 February 2021

Visa is an American multinational company providing payment services. The company operates in more than 200 countries around the world. And the number of Visa plastic cards is over 3.5 billion. The company earns a commission of 0.1% from each payment processed by the system. These commissions account for about a third of the company’s revenue. Visa also charges connection fees, which account for another third of its revenue. The rest of the revenue is generated by cross-border payment fees.

Visa’s main competitors are major fintech companies such as MasterCard, PayPal, Square and American Express Co.

Q4 revenue: $ 5.7B (-5% YoY)

Q4 Operating Income: $ 3.8B (-5% YoY)

Q4 net income: $ 3.1B (-4% YoY)

Earnings per share last quarter: $ 1.42, above $ 1.28 forecast

The company has high growth potential due to global digitalization

Distribution of revenue by business segment:

Data processing revenues – 50.24%

Service revenues – 44.88%

International transaction revenues – 28.83%

Other revenues – 6.55%

Client incentives – (30.50%)

Current Quarter EPS Forecast: $ 1.27

Visa has been growing for years. Over the past 10 years, it has grown 10 times. The company goes strictly upward even without significant drawdowns. business is as clear and stable as possible. Trends are leading people to shift more and more towards using digital money. Perhaps this is the only company that we recommend buying at any time over the past 10 years.

The company’s good financial results over the past few years are mainly associated with global digitalization – more and more people are starting to use online payments and plastic cards. The company pays dividends, but the yield on Visa shares is only about 0.6%, which is rather low for the American market. The company is quite active in mergers and acquisitions, buying smaller technology companies.

Thus, Visa is a promising company in terms of growth. The 2020 crisis even more likely had a positive impact on the company’s business – the number of online payments increased. Visa is also the leader in the fintech market in terms of capitalization, which allows it to gain positive returns on scale. It should be noted that the future growth of quotations is supported by the share buyback program.

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    10 February 2021
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