Is Buying Visa’s Stock Finally Paying Off?

NYSE: V | Visa Inc. CI A News, Ratings, and Charts

V – Despite several challenges, payment company Visa (V) has come a long way and is expected to keep benefiting from the rise in cashless transactions. However, is buying the stock paying off? Keep reading to find out…

In 2008, fintech company Visa Inc. (V) went public in a banking climate that was similar to today’s following the collapse of Bear Stearns. Its IPO raised $17.90 billion and was the largest sum of proceeds for a US IPO at the time.

Despite regulation, competition, and merchant lawsuits concerns, the company’s brand is well established, and it has a vast network of merchants and financial institutions that use its services. V has a market capitalization of $466.20 billion currently.

Let’s assess if buying the stock is finally paying off or not.

Digital payments are rapidly gaining popularity in the US and are expected to grow at a CAGR of 14.7%, leading to an estimated total transaction value of $3.53 trillion by 2027.

Shares of V have gained 24.7% over the past six months and 7.5% over the past three months, closing the last trading session at $221.81. The stock is trading above its 200-day moving average of $207.96.

In addition, the payment giant reported better-than-expected results in its first quarter of fiscal 2023. Its revenues exceeded analysts’ expectations by 3.1%, growing 12% year-over-year. Non-GAAP EPS also increased by 21%, surpassing analysts’ estimates by 8.4%.

Moreover, V’s revenue and EBITDA have increased at CAGRs of 8.7% and 8.8% over the past three years. Its net income and EPS have increased at CAGRs of 7% and 9.3% over the past three years.

Here is what could shape V’s performance in the near term:

Stable Dividend Record

V returned $4 billion in capital to shareholders through dividends and share repurchases in the fiscal first quarter.

While the company has a four-year dividend yield of 0.62%, V pays an annual dividend of $1.80 per share, which translates to a yield of 0.81% on the current share price. The company’s dividend payouts have grown at CAGRs of 14.5% over the past three years and 17.6% over the past five years.

Moreover, the company has raised its dividends for 14 consecutive years.

Robust Financials

V’s net revenues increased 12% year-over-year to $7.94 billion in the fiscal 2023 first quarter ended December 31, 2022. The company’s operating income grew 6.6% year-over-year to $5.09 billion.

Also, its non-GAAP net income rose 17.4% year-over-year to $4.58 billion, while non-GAAP EPS increased 20.4% from the year-ago quarter to $2.18.

Favorable Analyst Estimates

Analysts expect V’s revenue to increase 7.9% year-over-year to $7.76 billion for the fiscal second quarter ending March 2023. The company’s EPS for the current quarter is expected to rise 10.3% year-over-year to $1.98.

Street expects V’s revenue to increase 10.2% year-over-year to $32.29 billion in the fiscal year 2023. The company’s EPS for the current year is expected to grow 13% year-over-year to $8.47. Moreover, the company has surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.

High Profitability

V’s trailing-12-month EBIT margin of 67.14% is 203% higher than the industry average of 22.16%. Its trailing-12-month EBITDA margin of 70.09% is 224.9% higher than the industry average of 21.57%. Also, its trailing-12-month levered FCF margin of 50.02% is 175.2% higher than the industry average of 18.18%.

Additionally, the stock’s trailing-12-month ROCE, ROTC, and ROTA of 43.63%, 22.12%, and 17.77% are remarkably higher than the industry averages of 11.15%, 5.04%, and 1.15%, respectively.

POWR Ratings Show Promise

V has an overall rating of B, equating to a Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. V has an A grade for Quality, consistent with its high-profit margins.

Also, it has a B grade for Sentiment, in sync with favorable analyst estimates.

V is ranked #6 in the 46-stock Consumer Financial Services industry.

Click here to access V’s additional POWR Ratings for Growth, Value, Stability, and Momentum.

Bottom Line

V’s IPO in 2008 is widely regarded as one of the most successful IPOs in history. The company went public during trepidation in the banking world, but Visa has adapted to changes in the market to remain successful and is expected to thrive ahead.

Moreover, V saw a 7% year-over-year rise in their payments volume in constant-dollar in the fiscal first quarter, and a significant 22% growth in total cross-border volume compared to the same quarter the prior year. Additionally, the company’s processed transactions increased by 10% year-over-year in the latest quarter.

Also, Wall Street analysts expect the stock to hit $259.85 in the near term, indicating a potential upside of 17.2%.

Considering the strong financials, stable dividend-paying record and bullish analysts sentiments the stock might be an ideal buy.

How Does Visa Inc. (V) Stack up Against Its Peers?

V has an overall POWR Rating of B, equating to a Buy rating. Check out these other stocks within the Consumer Financial Services industry with a B (Buy) rating: OneMain Holdings, Inc. (OMF), MainStreet Bancshares, Inc. (MNSB), and FirstCash, Inc. (FCFS).

Consider This Before Placing Your Next Trade…

We are still in the midst of a bear market.

Yes, some special stocks may go up like the ones discussed in this article. But most will tumble as the bear market claws ever lower this year.

That is why you need to discover the “REVISED: 2023 Stock Market Outlook” that was just created by 40 year investment veteran Steve Reitmeister. There he explains:

  • 5 Warnings Signs the Bear Returns Starting Now!
  • Banking Crisis Concerns Another Nail in the Coffin
  • How Low Will Stocks Go?
  • 7 Timely Trades to Profit on the Way Down
  • Plan to Bottom Fish For Next Bull Market
  • 2 Trades with 100%+ Upside Potential as New Bull Emerges
  • And Much More!

You owe it to yourself to watch this timely presentation before placing your next trade.

REVISED: 2023 Stock Market Outlook >  


V shares rose $0.19 (+0.09%) in premarket trading Tuesday. Year-to-date, V has gained 6.97%, versus a 4.07% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
VGet RatingGet RatingGet Rating
OMFGet RatingGet RatingGet Rating
MNSBGet RatingGet RatingGet Rating
FCFSGet RatingGet RatingGet Rating

Most Popular Stories on

Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

3 Auto Stocks to Consider Over TSLA in April

Tesla (TSLA) reported a decline in deliveries in the first quarter, and Wall Street expects the company to deliver fewer vehicles than last year. Furthermore, rising competition, slowing EV sales, and stretched valuation make TSLA unattractive from an investment standpoint. Considering these factors, investors could consider buying fundamentally strong auto stocks Blue Bird (BLBD), Rolls-Royce Holdings (RYCEY), and Stellantis (STLA) over Tesla (TSLA). Read more...

3 Top-Rated Tech Stock Buys for Value in April

The technology sector is undergoing a notable surge, propelled by increasing digitalization endeavors among businesses and governmental support for technological progress. So, fundamentally sound tech stocks Box Inc. (BOX), Teradata (TDC), and Materialise (MTLS), which seem pretty undervalued, might be ideal buys this month. Continue reading...

Top Software Stocks at the Forefront of Market Gains

The software industry's prospects appear bright due to increasing investments in digital transformation, high demand for advanced software services from various sectors, and the integration of emerging technologies such as generative AI. Therefore, investors could consider buying quality software stocks Autodesk (ADSK), DocuSign (DOCU), and Pegasystems (PEGA) for solid gains. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Visa Inc. CI A (V) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All V News