12 Best Safe Dividend Stocks for 2025

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 131

5-Year Average Payout Ratio: 20.20%

Mastercard Incorporated (NYSE:MA) is a New York-based credit card company that offers a wide range of payment processing and related services to its consumers. The company’s third-quarter earnings grabbed investors’ attention. It reported $7.37 billion in revenue, reflecting a 13% increase from the same period the previous year. This growth was driven by robust consumer spending and continued demand for the company’s value-added services and solutions. Mastercard’s cash position remained strong, ending the quarter with over $11 billion in cash and cash equivalents, up from $8.6 billion at the end of December 2023. Moreover, the company’s operating cash flow reached nearly $10 billion, an increase from $7.8 billion in the same period last year.

In addition, Mastercard Incorporated (NYSE:MA) is up by over 18% in the past 12 months. The company has garnered investor confidence with its robust growth, substantial competitive edge, and ability to withstand economic challenges. The company mainly generates revenue through swipe fees, averaging slightly over 2% per transaction processed from co-branded cards. This simple yet dependable business model performs well in prosperous times and shields the company from credit risks during economic slowdowns.

Mastercard Incorporated (NYSE:MA) declared a 15% increase in its quarterly dividend on December 17. This marked the company’s 13th consecutive year of dividend growth, which makes MA one of the best dividend stocks on our list. It now pays a quarterly dividend of $0.76 per share and has a dividend yield of 0.60%, as of January 13.

Montaka Global Investments made the following comment about MA in its Q3 2024 investor letter:

“Montaka owns several duopolists in the financial services industry, including Visa and Mastercard Incorporated (NYSE:MA) in payments; and S&P Global in credit ratings and financial data services. These businesses have competitively protected and reliably growing core businesses. But they also have newer, high-probability adjacent opportunities. The market, however, is underappreciating this powerful combination, in our view.

For Visa and Mastercard, their core businesses in global payment processing are being complemented by significant growth in two areas: New processing opportunities in peer-to-peer, business-to-business, business-to-consumer, and government-to-consumer payments; and Value-added services, including risk, fraud-detection, issuance, acceptance, and open banking.”

As per Insider Monkey’s database of Q3 2024, 131 hedge funds owned investments in Mastercard Incorporated (NYSE:MA), compared with 142 in the previous quarter. The stakes owned by these hedge funds have a total value of more than $17 billion.