Morningstar | Mastercard Has Been Outperforming Its Larger Peer
Mastercard has multiple characteristics that should draw investors’ attention. First, despite ongoing evolution in the payments space, we think a wide moat surrounds the business and view Mastercard’s position within the current global electronic payment infrastructure as essentially unassailable. Second, Mastercard benefits from the ongoing shift toward electronic payments, which provides plenty of opportunities to utilize its wide moat to create value. Digital payments, on a global basis, surpassed cash payments just a couple of years ago, suggesting this trend still has a lot of room to run, and we think emerging markets could offer a further spurt of growth even if growth in developed markets slows. Finally, Mastercard is something of a tollbooth business, and the company is relatively agnostic to the smaller shifts within electronic payments, as it earns fees regardless of whether payment is credit, debit, or mobile.Mastercard is not completely without issues in the near term. Growth in cross-border transactions, which are particularly lucrative for the networks, are under some pressure, although Mastercard appears to be materially outperforming Visa in this area. We think it is likely that smaller and more regional networks are building out additional capacity for cross-border transactions, which could eat into growth a bit in the coming years. However, while this situation bears watching, Visa and Mastercard’s global networks remain unparalleled, and we think this will remain the case for many years to come. Ultimately, this should put something of a floor on the situation.In the near term, we see the state of the economy as Mastercard’s biggest risk. A downturn in the economy would slow growth, as Mastercard’s revenue is sensitive to the volume and dollar amount of consumer transactions. Outside of that, though, we don’t see any industry trends that will impede Mastercard’s ability to maintain double-digit growth in the coming years.Mastercard is a technology company in the global payments industry. The company's solutions enabling consumers to use electronic forms of payment instead of cash and checks. The company provides a range of payment solutions and services using its brands, including Mastercard?, Maestro? and Cirrus?. The company is a multi-rail network that provides customers one partner to turn to for their domestic and cross-border payment needs. The company has additional payment capabilities that include automated clearing house transactions. The company also provides offerings such as cyber and intelligence products, information and analytics services, consulting, loyalty and reward programs and processing.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.