For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in MasterCard (
MA Quick Quote MA - Free Report) ten years ago? It may not have been easy to hold on to MA for all that time, but if you did, how much would your investment be worth today? MasterCard's Business In-Depth
With that in mind, let's take a look at MasterCard's main business drivers.
Founded in 1966 and headquartered in Purchase, NY, Mastercard Inc. 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's payment solutions include payment programs, marketing, product development, technology, processing, consulting and information services. It also provides worldwide transaction processing and other payment-related services, which include facilitating the authorization, clearing and settlement process of transactions, as well as processing cross-border and currency conversion transactions.
In May 2001, the company was incorporated as a Delaware stock corporation.
MasterCard manages and licenses payment card brands including MasterCard, Maestro and Cirrus. The company generates revenues from the fees it charges its customers for transaction processing and other payment-related services. It also earns revenues by charging customers for assessments based on the gross dollar volume (GDV) of activity on the cards that carry MasterCard brands. Revenues of the company are based on factors such as cross-border volumes, number of transactions, GDV and pricing changes.
The company operates a unique and proprietary global payments network that links issuers and acquirers around the globe to facilitate the switching of transactions, permitting account holders to use a Mastercard product at millions of acceptance locations worldwide. Its core network facilitates an efficient and secure means for receiving payments, a convenient payment method for consumers to access their funds and a channel for businesses to receive insight that is derived from its network. Mastercard authorizes, clears, and settles transactions through its core network for issuer customers in more than 150 currencies and in more than 210 countries and territories. Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in MasterCard ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $12,559.15, or a 1,155.92% gain, as of July 27, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 232.02% and gold's return of 6.98% over the same time frame.
Going forward, analysts are expecting more upside for MA.
Mastercard’s shares have outperformed its industry in the past year. The company executed several acquisitions, which helped it expand its addressable markets and drive new revenue streams. New deals, renewed agreements and an expansion of service offerings are expected to drive its long-term growth. The COVID crisis accelerated the use of electronic forms of payment with much greater adoption of digital and contactless solutions. This provides an opportunity for the company’s business to expedite the shift to digital forms of payment. The company is well-poised to gain from its consistent cash-generating abilities. Strong capital position boosts investment in business. However, steep costs might stress the company's margins. Its cross-border volumes will remain suppressed due to COVID-led restrictions on travel and entertainment.
Shares have gained 6.83% over the past four weeks and there have been 4 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.