Mastercard Incorporated (MA): A Bull Case Theory

We came across a bullish thesis on Mastercard Incorporated (MA) on Substack by Chit Chat Stocks. In this article, we will summarize the bulls’ thesis on MA. Mastercard Incorporated (MA)’s share was trading at $562.75 as of Feb 7^th. MA’s trailing and forward P/E were 40.51 and 35.34 respectively according to Yahoo Finance.

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Mastercard’s Q4 2024 earnings highlight its continued strength as a leader in the payments sector, reporting a robust 12% volume growth and a 6% increase in cards in circulation. These figures reflect the company’s enduring competitive advantages, which have allowed it to thrive despite potential threats from private or government alternatives in the digital payments space. Mastercard’s consistent growth and dominance in global card payments are supported by its powerful economic moat, which tightens as the company expands. Over the years, Mastercard has proven to be one of the best investments, with a staggering 29.9% total return CAGR since its IPO in 2006. This kind of performance highlights Mastercard’s resilience and the durability of its business model, which is protected from inflation and outside competition. Although the stock rarely trades at a significant discount to its forward earnings potential, there have been brief moments, such as October 2022, when it offered an attractive entry point. For investors, Mastercard remains a fantastic business with immense long-term potential. Should the market present another opportunity to buy at a discount, it could be an ideal moment to add this exceptional stock to one’s portfolio.

Mastercard Incorporated (MA) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 131 hedge fund portfolios held MA at the end of the third quarter which was 142 in the previous quarter. While we acknowledge the risk and potential of MA as an investment, our conviction lies in the belief that some 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 MA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.