MC vs Visa Which Should You Buy?

Investors often compare the performance of Mastercard (MC) and Visa stocks to determine which is a better investment. Both companies are major players in the global payment processing industry, with strong revenue growth and market dominance. While Visa has a larger market share and higher revenue, Mastercard has been gaining ground with innovative technologies and strategic partnerships. Understanding the differences in their business models, growth strategies, and financial performance can help investors make informed decisions when choosing between MC and Visa stocks.

MC or Visa?

When comparing MC and Visa, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between MC and Visa.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. MC has a dividend yield of 8.65%, while Visa has a dividend yield of 0.68%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. MC reports a 5-year dividend growth of 2.96% year and a payout ratio of 95.14%. On the other hand, Visa reports a 5-year dividend growth of 16.27% year and a payout ratio of 21.36%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with MC P/E ratio at 11.49 and Visa's P/E ratio at 31.93. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. MC P/B ratio is 2.13 while Visa's P/B ratio is 16.11.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, MC has seen a 5-year revenue growth of 0.10%, while Visa's is 0.73%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with MC's ROE at 19.02% and Visa's ROE at 49.64%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ฿10.20 for MC and $314.34 for Visa. Over the past year, MC's prices ranged from ฿9.65 to ฿14.90, with a yearly change of 54.40%. Visa's prices fluctuated between $252.70 and $317.42, with a yearly change of 25.61%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.