13 Best Quality Stocks To Buy

7. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Shareholders In Q1 2024: 148

Payments platform provider Mastercard Incorporated (NYSE:MA) has beaten adjusted analyst EPS estimates in all four of its latest quarters. The average of 38 one year share price targets is $512, and the shares are rated Strong Buy on average. May 2024 was also a rather historic month for Mastercard Incorporated (NYSE:MA)’s shares as it saw Piper Sandler initiative coverage. The research firm set an Overweight weighting on the shares and ascribed them a price target of $531. At the heart of the coverage was analyst Arvind Ramnani’s belief that Mastercard Incorporated (NYSE:MA) is slated to grow its revenue by 11% in 2024 and ~13% next year. Tailwinds to this growth include strong performace by the firm’s value added services and payments business divisions.

As of March 2024 end, 148 out of the 933 hedge funds profiled by Insider Monkey were Mastercard Incorporated (NYSE:MA)’s stakeholders. Charles Akre’s Akre Capital Management owned the most valuable stake which was worth $2.2 billion.

A key player in the fintech market, Mastercard Incorporated (NYSE:MA) was mentioned by Baron Funds in its Q1 2024 investor letter which shared:

Payments was another standout theme thanks to double-digit gains from global payment companies Mastercard Incorporated and Fiserv, Inc. Mastercard’s shares rose after the company reported quarterly financial results that exceeded Street expectations, with 13% revenue growth and 20% EPS growth. Spending volume remains healthy, with outsized growth in international markets and cross-border transactions. Management also provided encouraging financial guidance for 2024 that calls for double-digit revenue growth and margin expansion. Meanwhile, investors largely shrugged off potential risks to Mastercard stemming from Capital One’s announced acquisition of Discover.

Mastercard currently trades at a forward PE ratio of 31 which is in line with its and Visa’s historical PE multiples. Mastercard shares returned 69% over the last 5 years. We believe Mastercard is likely to deliver similar returns over the following 5 years. While we acknowledge the potential of Mastercard and Visa, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.