10 Best Credit Card Stocks to Buy Now

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Investors: 142

Mastercard Incorporated (NYSE:MA), the world’s second-largest credit card payment network in the world, has handled volume approaching $9 trillion in 2023. Mastercard accepts payments in more than 200 nations and handles transactions in more than 150 currencies.

Along with payment gateway services, the company offers a variety of payment options, such as credit, debit, and prepaid cards.

The credit card payment network behemoth posted strong financial results in the second quarter of 2024, with a 17% YoY increase in profit to $3.3 billion. Earnings per share excluding one-time costs were $3.59, above market projections of $3.51. In addition to exceeding market forecasts, revenue increased by 13% YoY to $6.96 billion. Growth in major international markets like Europe and Latin America, along with a solid U.S. customer base, contributed to the impressive results.

In Q2 2024, Mastercard Incorporated (NYSE:MA) disclosed that the quantity and value of transactions executed on its credit card network increased by 11% YoY. Cross-border payment volume growth of 17% and solid consumer spending were credited for the positive result.

Given its reliance on consumer health, the company is susceptible to downturns in the economy, particularly if spending is curtailed as a result of the Fed’s rate hikes. Furthermore, pressure on low-income clients may affect transaction volumes, which could jeopardize long-term expansion.

Logan Purk, technology analyst for Edward Jones, stated, “Mastercard’s results, while not perfect, should give reassurance that the spending environment remains solid,”

L1 Capital International Fund stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q2 2024 investor letter:

“The share prices of Mastercard Incorporated (NYSE:MA) and Visa, both long term Fund investments, have both drifted down over recent months. There have been no dramatic developments, but there has been a general slight softening in the rate of growth of consumer spending in the U.S. and globally, a court decision rejecting Mastercard and Visa’s proposed settlement of a long-lasting dispute with U.S. merchants as well as other modest adverse regulatory developments. We continue to view Mastercard and Visa as two of the highest quality businesses in the world, and both are well placed to continue to deliver attractive, risk adjusted returns to shareholders over time.”

Charles Akre’s Akre Capital Management is the largest shareholder in the company, with 4,039,349 shares worth $1.78 billion.