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Bulll of the Day:Mastercard (MA)

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Headquartered in Purchase, NY, Mastercard (MA - Free Report) is a leading global payment solutions company that provides an array of services in support of the credit, debit, mobile, web-based and contactless payments, and other related electronic payment programs to financial institutions and other entities.

The company operates the world’s fastest payment processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries.

Better-than-expected Results

The company reported excellent results, beating on both the top and bottom lines and also upgraded its guidance.

Adjusted earnings of $1.50 per share, were ahead of the Zacks Consensus Estimate of $1.26. Earnings were up 43% year over year (on a currency neutral basis). Revenues of $3.6 billion were up 27% year over year (on a currency neutral basis).

Rising consumer spending and confidence drove the growth.

“We are investing in areas such as safety and security and our digital solutions to drive long-term growth, with a focus on delivering simple and secure transactions across all channels,” said the CEO.

Rising Estimates

Analysts have been raising the estimates for the company after strong results. Zacks Consensus Estimates for the current and next year have surged to $6.22 per share and $7.25 per share, from $5.94 and $6.96 respectively, before the results. Rising estimates sent the stock back to a Zacks Rank #1 (Strong Buy).

As you can see from the chart below, the company has an excellent record of beating estimates:

Returning Capital to Shareholders

During Q1 2018, the company bought back approximately 7.9 million shares at a cost of $1.4 billion and paid $263 million in dividends.

Bottom-Line

This stock is up more than 27% this year but with its leadership position in the payments market, continued innovation and investments in technology, and accretive innovations, it is poised to benefit further from the secular shift toward digital payments.

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