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Mastercard (MA) Okays 16% Dividend Hike, $11B Buyback Program
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Mastercard Incorporated’s (MA - Free Report) Board of Directors recently approved a 16% hike in the quarterly cash dividend to boost shareholder value. The increased dividend is 66 cents per share compared with the previous payout of 57 cents per share. Last year, MA had increased its quarterly dividend by 16% as well.
The hiked dividend will be paid out on Feb 9, 2024, to common shareholders of record as of Jan 9, 2024. With the latest announcement, Mastercard seems to be on a continuous dividend hike spree for a decade now. It has grown its dividend at a 10-year CAGR of 15.2%. Further, it has been a regular dividend-paying company for nearly two decades. Based on the stock’s Dec 5 closing price of $408.69, the new dividend will yield 0.6% to the company.
Apart from implementing dividend hikes, Mastercard also actively indulges in the pursuit of share buybacks. As evidence of the same, management is ready with a new share repurchase program even before the complete exhaustion of buyback capacity in the ongoing program. Under the new program, MA can buy back Class A common shares of up to $11 billion and it will come into effect once the $9-billion share buyback program (announced in December 2022) concludes. The prevailing program had a leftover capacity of roughly $3.5 billion as of Dec 1, 2023.
The company remained quite active in returning value to shareholders last year, wherein share repurchases to the tune of $8.8 billion were made and dividends worth $1.9 billion were distributed. Mastercard has sustained its solid capital deployment history in the first nine months of 2023 as well. In the said time frame, MA bought back common shares of $7.2 billion and paid out dividends of $1.6 billion to shareholders.
Another indicator of Mastercard’s comparative efficiency in utilizing shareholders’ funds relative to its industry peers is its return on equity figure. The metric was 188.8% as of Sep 30, 2023, way higher than the industry’s average of 43.4%.
A solid financial position provides the ground for Mastercard to resort to regular share buybacks and dividend payments. Adequate cash reserves as well as steady operating cash flows bear testament to MA’s financial strength. It had cash and cash equivalents of $6.9 billion as of Sep 30, 2023. MA also generated an operating cash flow of $7.9 billion in the first nine months of 2023.
Apart from undertaking commendable shareholder-friendly moves, a sound financial stand also equips Mastercard to resort to frequent investments in business and come up with an advanced suite of digital payment solutions to infuse digitization across different parts of the globe.
Shares of Mastercard have gained 17.6% in the past year compared with the industry’s 17% growth. MA currently carries a Zacks Rank #3 (Hold).
The bottom line of Huron Consulting outpaced estimates in each of the last four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.9% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.4% from the year-ago actual. The consensus mark for HURN’s 2023 earnings has moved 1.9% north in the past 30 days.
SPX Technologies earnings outpaced estimates in each of the trailing four quarters, the average surprise being 28.04%. The Zacks Consensus Estimate for SPXC’s 2023 earnings suggests an improvement of 38.7% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20% from the year-ago actual. The consensus mark for SPXC’s 2023 earnings has moved 0.7% north in the past 60 days.
The bottom line of Trane Technologies outpaced estimates in each of the last four quarters, the average surprise being 6.75%. The Zacks Consensus Estimate for TT’s 2023 earnings suggests an improvement of 22.2% from the year-ago reported figure. The consensus mark for revenues suggests growth of 10.6% from the year-ago actual. The consensus mark for TT’s 2023 earnings has moved 1.4% north in the past 60 days.
Shares of Huron Consulting, SPX Technologies and Trane Technologies have gained 34.6%, 34.2% and 30.9%, respectively, in the past year.
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Mastercard (MA) Okays 16% Dividend Hike, $11B Buyback Program
Mastercard Incorporated’s (MA - Free Report) Board of Directors recently approved a 16% hike in the quarterly cash dividend to boost shareholder value. The increased dividend is 66 cents per share compared with the previous payout of 57 cents per share. Last year, MA had increased its quarterly dividend by 16% as well.
The hiked dividend will be paid out on Feb 9, 2024, to common shareholders of record as of Jan 9, 2024. With the latest announcement, Mastercard seems to be on a continuous dividend hike spree for a decade now. It has grown its dividend at a 10-year CAGR of 15.2%. Further, it has been a regular dividend-paying company for nearly two decades. Based on the stock’s Dec 5 closing price of $408.69, the new dividend will yield 0.6% to the company.
Apart from implementing dividend hikes, Mastercard also actively indulges in the pursuit of share buybacks. As evidence of the same, management is ready with a new share repurchase program even before the complete exhaustion of buyback capacity in the ongoing program. Under the new program, MA can buy back Class A common shares of up to $11 billion and it will come into effect once the $9-billion share buyback program (announced in December 2022) concludes. The prevailing program had a leftover capacity of roughly $3.5 billion as of Dec 1, 2023.
The company remained quite active in returning value to shareholders last year, wherein share repurchases to the tune of $8.8 billion were made and dividends worth $1.9 billion were distributed. Mastercard has sustained its solid capital deployment history in the first nine months of 2023 as well. In the said time frame, MA bought back common shares of $7.2 billion and paid out dividends of $1.6 billion to shareholders.
Another indicator of Mastercard’s comparative efficiency in utilizing shareholders’ funds relative to its industry peers is its return on equity figure. The metric was 188.8% as of Sep 30, 2023, way higher than the industry’s average of 43.4%.
A solid financial position provides the ground for Mastercard to resort to regular share buybacks and dividend payments. Adequate cash reserves as well as steady operating cash flows bear testament to MA’s financial strength. It had cash and cash equivalents of $6.9 billion as of Sep 30, 2023. MA also generated an operating cash flow of $7.9 billion in the first nine months of 2023.
Apart from undertaking commendable shareholder-friendly moves, a sound financial stand also equips Mastercard to resort to frequent investments in business and come up with an advanced suite of digital payment solutions to infuse digitization across different parts of the globe.
Shares of Mastercard have gained 17.6% in the past year compared with the industry’s 17% growth. MA currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Business Services space are Huron Consulting Group Inc. (HURN - Free Report) , SPX Technologies, Inc. (SPXC - Free Report) and Trane Technologies plc (TT - Free Report) . While Huron Consulting sports a Zacks Rank #1 (Strong Buy), SPX Technologies and Trane Technologies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Huron Consulting outpaced estimates in each of the last four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.9% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.4% from the year-ago actual. The consensus mark for HURN’s 2023 earnings has moved 1.9% north in the past 30 days.
SPX Technologies earnings outpaced estimates in each of the trailing four quarters, the average surprise being 28.04%. The Zacks Consensus Estimate for SPXC’s 2023 earnings suggests an improvement of 38.7% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20% from the year-ago actual. The consensus mark for SPXC’s 2023 earnings has moved 0.7% north in the past 60 days.
The bottom line of Trane Technologies outpaced estimates in each of the last four quarters, the average surprise being 6.75%. The Zacks Consensus Estimate for TT’s 2023 earnings suggests an improvement of 22.2% from the year-ago reported figure. The consensus mark for revenues suggests growth of 10.6% from the year-ago actual. The consensus mark for TT’s 2023 earnings has moved 1.4% north in the past 60 days.
Shares of Huron Consulting, SPX Technologies and Trane Technologies have gained 34.6%, 34.2% and 30.9%, respectively, in the past year.