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Mastercard vs. American Express: Which Stock Has More Upside Now?
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Key Takeaways
Mastercard posted 16% revenue growth in Q1 2026; value-added services now contribute nearly 41% of revenues.
American Express grew billed business 10% and added over 70% of new accounts through fee-based products.
Mastercard's average analyst price target implies 28.7% upside versus 6.3% for American Express.
The global payments industry continues to benefit from the ongoing migration from cash to electronic transactions, supported by rising card usage, expanding e-commerce activity and growing demand for digital payment solutions worldwide. As consumers and businesses increasingly embrace digital commerce, investors remain focused on companies that can sustain transaction growth while adapting to changing payment trends.
Mastercard Incorporated (MA - Free Report) and American Express Company (AXP - Free Report) are two of the most prominent names in the payments space, making them a natural comparison for investors seeking exposure to this long-term trend. While both benefit from higher payment volumes and global spending activity, their business models differ significantly. MA primarily operates a payment network, whereas AXP combines network services with card issuance and lending, resulting in distinct growth drivers, revenue mixes and risk profiles.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which stock offers greater upside right now.
The Case for Mastercard
Mastercard, with a market cap of $435.6 billion, generates most of its revenues from payment processing and network services rather than lending activities. This network-centric model allows the company to benefit from rising payment volumes and cross-border transactions while maintaining relatively limited credit exposure. Growth is increasingly supported by value-added services, real-time payments and commercial payment solutions, which broaden revenue sources beyond traditional card spending.
In the first quarter of 2026, the company’s net revenues rose 16% year over year, along with 12% growth in payment network net revenues. It delivered 22.4% growth in value-added services and solutions revenues in the first quarter, supported by demand for cybersecurity, fraud prevention, analytics and customer engagement solutions, and now contributes to nearly 41% of the company’s net revenues. It beat earnings estimates in each of the past four quarters, with an average surprise of 5.5%.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard’s expanding network continues to create opportunities for additional revenue streams. Switched transactions now account for more than 70% of transaction volume, up from about 60% in 2020, generating richer data that supports the growth of higher-margin services and strengthens customer relationships.
The company is also positioning itself for emerging payment technologies through investments in agentic commerce and digital assets. Partnerships with OpenAI and other technology firms, the rollout of Verifiable Intent and the announced BVNK acquisition strengthen its ability to facilitate secure transactions across both traditional and digital payment ecosystems.
MA balances investments in innovation with shareholder returns through dividends and buybacks, supporting sustainable long-term growth despite regulatory and competitive pressures. In first-quarter 2026, it repurchased $4 billion of stock and bought an additional $1.7 billion through April 27, 2026, while paying $777 million in dividends for the quarter. The company maintains a solid capital position with $7.9 billion in cash, while short-term debt amounted to $1.7 billion as of March 31, 2026. Its return on capital of 62.16X is significantly higher than AXP’s 12.35X and the industry’s 28.17X.
The Case for American Express
Unlike Mastercard, American Express, with a market cap of $232.4 billion, operates an integrated model that combines payment network services with card issuance and lending. It continues to benefit from strong spending activity among affluent consumers and younger cardholders. In the first quarter of 2026, billed business increased 10% year over year, while more than 70% of newly acquired accounts came from fee-based products. These trends support both spending growth and recurring fee revenues.
The company continues to strengthen its premium value proposition through travel, dining, entertainment and sports-focused offerings. Recent initiatives include a global NFL partnership, expanded airport lounge investments and the planned acquisition of TheFork from Tripadvisor, which would enhance American Express' dining ecosystem and deepen engagement with card members across Europe. Continued additions to its hotel portfolio further support customer loyalty and spending activity across its premium card base. In the first quarter of 2026, total revenues (net of interest expenses) increased 11% year over year, while total transactions rose 10%. The company beat earnings in three of the past four quarters and missed once, with an average surprise of 4%.
American Express Company Price, Consensus and EPS Surprise
Commercial payments represent another key growth avenue. AXP outlined plans for eight new or enhanced commercial products and capabilities, including cash-back offerings and expense-management tools. These initiatives broaden the company's presence across small-business, middle-market and corporate customers.
Artificial intelligence is becoming an increasingly important part of the growth strategy. The launch of the ACE Developer Kit and Agent Purchase Protection extends AXP's presence into AI-powered commerce, while ongoing investments in technology aim to enhance security, customer experiences and operational efficiency across its closed-loop network.
As of March 31, 2026, the company had $53.8 billion in cash and cash equivalents against just $1.7 billion in short-term borrowings. AXP returned $2.3 billion to its shareholders in the first quarter of 2026 through dividends and buybacks. In March 2026, it raised its quarterly dividend by 16% to 95 cents per share. Its dividend yield of 1.1% is higher than MA’s 0.7%.
Price Performance Comparison
Over the past six months, shares of AXP have shed less value than those of MA. Meanwhile, the S&P 500 has increased 8.9% during this time.
Price Performance – MA, AXP & S&P 500
Image Source: Zacks Investment Research
How Do the Estimates Compare for MA & AXP?
The Zacks Consensus Estimate favors MA at this stage. The consensus estimate for MA’s 2026 earnings indicates a 15.2% increase from a year ago. Meanwhile, the consensus estimate for revenues suggests 12.8% growth. On the other hand, the consensus estimate for AXP’s 2026 earnings indicates 14.4% growth from a year ago, while the same for revenues suggests a 9.7% rise.
Valuation: MA vs. AXP
Valuation-wise, Mastercard trades at a premium forward price-to-earnings multiple relative to AXP, reflecting its capital-light structure and lower risk profile. MA currently trades at a forward P/E of 23.46X, higher than AXP’s 18.15X. The valuation gap underscores the market’s preference for Mastercard’s stability and diversified growth drivers.
Image Source: Zacks Investment Research
Price Target
MA currently trades below its average analyst price target of $645.19, implying a 28.7% potential upside from current levels. AXP also trades below its average analyst price target of $362.35, implying a 6.3% potential upside from current levels.
Conclusion
Both Mastercard and American Express are well-positioned to benefit from the continued expansion of digital payments, supported by strong brands, global reach and healthy spending trends. AXP offers exposure to affluent consumers, growing fee-based products and an integrated payments-and-lending model, while MA benefits from its network-focused structure, broad acceptance footprint and expanding portfolio of value-added services.
Despite trading at a premium valuation, Mastercard’s asset-light business model, faster growth profile and expanding revenue streams suggest greater upside potential than American Express at current levels, even though both companies currently carry a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Mastercard vs. American Express: Which Stock Has More Upside Now?
Key Takeaways
The global payments industry continues to benefit from the ongoing migration from cash to electronic transactions, supported by rising card usage, expanding e-commerce activity and growing demand for digital payment solutions worldwide. As consumers and businesses increasingly embrace digital commerce, investors remain focused on companies that can sustain transaction growth while adapting to changing payment trends.
Mastercard Incorporated (MA - Free Report) and American Express Company (AXP - Free Report) are two of the most prominent names in the payments space, making them a natural comparison for investors seeking exposure to this long-term trend. While both benefit from higher payment volumes and global spending activity, their business models differ significantly. MA primarily operates a payment network, whereas AXP combines network services with card issuance and lending, resulting in distinct growth drivers, revenue mixes and risk profiles.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which stock offers greater upside right now.
The Case for Mastercard
Mastercard, with a market cap of $435.6 billion, generates most of its revenues from payment processing and network services rather than lending activities. This network-centric model allows the company to benefit from rising payment volumes and cross-border transactions while maintaining relatively limited credit exposure. Growth is increasingly supported by value-added services, real-time payments and commercial payment solutions, which broaden revenue sources beyond traditional card spending.
In the first quarter of 2026, the company’s net revenues rose 16% year over year, along with 12% growth in payment network net revenues. It delivered 22.4% growth in value-added services and solutions revenues in the first quarter, supported by demand for cybersecurity, fraud prevention, analytics and customer engagement solutions, and now contributes to nearly 41% of the company’s net revenues. It beat earnings estimates in each of the past four quarters, with an average surprise of 5.5%.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Mastercard’s expanding network continues to create opportunities for additional revenue streams. Switched transactions now account for more than 70% of transaction volume, up from about 60% in 2020, generating richer data that supports the growth of higher-margin services and strengthens customer relationships.
The company is also positioning itself for emerging payment technologies through investments in agentic commerce and digital assets. Partnerships with OpenAI and other technology firms, the rollout of Verifiable Intent and the announced BVNK acquisition strengthen its ability to facilitate secure transactions across both traditional and digital payment ecosystems.
MA balances investments in innovation with shareholder returns through dividends and buybacks, supporting sustainable long-term growth despite regulatory and competitive pressures. In first-quarter 2026, it repurchased $4 billion of stock and bought an additional $1.7 billion through April 27, 2026, while paying $777 million in dividends for the quarter. The company maintains a solid capital position with $7.9 billion in cash, while short-term debt amounted to $1.7 billion as of March 31, 2026. Its return on capital of 62.16X is significantly higher than AXP’s 12.35X and the industry’s 28.17X.
The Case for American Express
Unlike Mastercard, American Express, with a market cap of $232.4 billion, operates an integrated model that combines payment network services with card issuance and lending. It continues to benefit from strong spending activity among affluent consumers and younger cardholders. In the first quarter of 2026, billed business increased 10% year over year, while more than 70% of newly acquired accounts came from fee-based products. These trends support both spending growth and recurring fee revenues.
The company continues to strengthen its premium value proposition through travel, dining, entertainment and sports-focused offerings. Recent initiatives include a global NFL partnership, expanded airport lounge investments and the planned acquisition of TheFork from Tripadvisor, which would enhance American Express' dining ecosystem and deepen engagement with card members across Europe. Continued additions to its hotel portfolio further support customer loyalty and spending activity across its premium card base. In the first quarter of 2026, total revenues (net of interest expenses) increased 11% year over year, while total transactions rose 10%. The company beat earnings in three of the past four quarters and missed once, with an average surprise of 4%.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
Commercial payments represent another key growth avenue. AXP outlined plans for eight new or enhanced commercial products and capabilities, including cash-back offerings and expense-management tools. These initiatives broaden the company's presence across small-business, middle-market and corporate customers.
Artificial intelligence is becoming an increasingly important part of the growth strategy. The launch of the ACE Developer Kit and Agent Purchase Protection extends AXP's presence into AI-powered commerce, while ongoing investments in technology aim to enhance security, customer experiences and operational efficiency across its closed-loop network.
As of March 31, 2026, the company had $53.8 billion in cash and cash equivalents against just $1.7 billion in short-term borrowings. AXP returned $2.3 billion to its shareholders in the first quarter of 2026 through dividends and buybacks. In March 2026, it raised its quarterly dividend by 16% to 95 cents per share. Its dividend yield of 1.1% is higher than MA’s 0.7%.
Price Performance Comparison
Over the past six months, shares of AXP have shed less value than those of MA. Meanwhile, the S&P 500 has increased 8.9% during this time.
Price Performance – MA, AXP & S&P 500
Image Source: Zacks Investment Research
How Do the Estimates Compare for MA & AXP?
The Zacks Consensus Estimate favors MA at this stage. The consensus estimate for MA’s 2026 earnings indicates a 15.2% increase from a year ago. Meanwhile, the consensus estimate for revenues suggests 12.8% growth. On the other hand, the consensus estimate for AXP’s 2026 earnings indicates 14.4% growth from a year ago, while the same for revenues suggests a 9.7% rise.
Valuation: MA vs. AXP
Valuation-wise, Mastercard trades at a premium forward price-to-earnings multiple relative to AXP, reflecting its capital-light structure and lower risk profile. MA currently trades at a forward P/E of 23.46X, higher than AXP’s 18.15X. The valuation gap underscores the market’s preference for Mastercard’s stability and diversified growth drivers.
Image Source: Zacks Investment Research
Price Target
MA currently trades below its average analyst price target of $645.19, implying a 28.7% potential upside from current levels. AXP also trades below its average analyst price target of $362.35, implying a 6.3% potential upside from current levels.
Conclusion
Both Mastercard and American Express are well-positioned to benefit from the continued expansion of digital payments, supported by strong brands, global reach and healthy spending trends. AXP offers exposure to affluent consumers, growing fee-based products and an integrated payments-and-lending model, while MA benefits from its network-focused structure, broad acceptance footprint and expanding portfolio of value-added services.
Despite trading at a premium valuation, Mastercard’s asset-light business model, faster growth profile and expanding revenue streams suggest greater upside potential than American Express at current levels, even though both companies currently carry a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.