12 Best Forever Stocks To Buy Now

6. Visa Inc. (NYSE:V)

Number of Hedge Funds Holding Stakes as of Q2: 163

Market Cap as of September 18, 2024: $576.44 Billion

Visa Inc. (NYSE:V) is a financial services company offering a transaction processing network for clearing and settling payment transactions. The company also offers credit, debit, and prepaid card products and digital wallets.

It is one of the best forever stocks to buy now as it is well positioned to benefit as the US Federal Reserve cuts interest rates. The reduction is expected to bolster consumer purchasing power and should result in increased speeding on Visa cards, allowing the company to generate more revenues on transaction fees.

Given that Visa Inc. (NYSE:V) is a leading figure in an expanding sector, it is well-positioned to benefit from increased payment processing as people shift from using cash. With proven technology, a reputable and recognized brand, and the capacity to keep investing in technology and expanding its market presence, it would be challenging for a newcomer to replace Visa.

In the last ten years, Visa Inc. (NYSE:V) has grown its revenue by 10% on a yearly basis, which led to an impressive 15% yearly growth in earnings over that period. These numbers are truly remarkable. Additionally, Visa has consistently rewarded its shareholders with dividend hikes. The company has maintained this practice for 16 years, with an average annual increase of 18% over the last 10 years. This rate of dividend hikes is extraordinary for such a long duration.

The company remains in a solid financial position, with $18.9 billion in free cash flow as of the end of June. This explains its ability to continue rewarding investors with a 0.72% dividend yield while trading at a great discount with a price-to-earnings multiple of 26.

In the second quarter, 163 hedge funds held stakes in Visa Inc. (NYSE:V), totaling $24.9 billion. As of June 30, TCI Fund Management was the largest shareholder, with stakes worth $4.41 billion.

Wedgewood Partners stated the following regarding Visa Inc. (NYSE:V) in its Q2 2024 investor letter:

“Visa Inc. (NYSE:V) detracted from performance despite healthy corporate results. The company grew earnings per share +12% as payment volume growth was up +8% and cross-border payment grew +16%, adjusted for currency. There are over 4.4 billion Visa debit and credit cards in circulation generating over $15 trillion in volume over the past 12 months. There is another estimated $10 trillion in cash and check volume, globally, which we think Visa can continue to move over to its electronic payment rails. In addition, the company has spent the past several years extending its payment capabilities into new flows of commerce, particularly for business-to-business transactions. This is another, extremely large (+$200 trillion) long-term growth opportunity for Visa that we believe investors are ignoring.”