Visa vs Mastercard Which Is More Lucrative?

Visa and Mastercard are two of the leading companies in the payment processing industry. Both companies have a strong track record of growth and profitability, making their stocks attractive to investors looking for stable returns. However, there are some key differences between Visa and Mastercard that investors should consider. Visa has a larger global network and higher market share, while Mastercard has been focused on expanding its presence in emerging markets. Overall, both stocks offer the potential for long-term growth and financial performance.

Visa or Mastercard?

When comparing Visa and Mastercard, 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 Visa and Mastercard.

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. Visa has a dividend yield of 0.68%, while Mastercard has a dividend yield of 0.5%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Visa reports a 5-year dividend growth of 16.27% year and a payout ratio of 21.36%. On the other hand, Mastercard reports a 5-year dividend growth of 17.92% year and a payout ratio of 19.28%.

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 Visa P/E ratio at 31.51 and Mastercard's P/E ratio at 39.62. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Visa P/B ratio is 15.89 while Mastercard's P/B ratio is 65.63.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Visa has seen a 5-year revenue growth of 0.73%, while Mastercard's is 0.85%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Visa's ROE at 49.64% and Mastercard's ROE at 169.78%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $314.34 for Visa and $528.96 for Mastercard. Over the past year, Visa's prices ranged from $252.70 to $317.42, with a yearly change of 25.61%. Mastercard's prices fluctuated between $411.60 and $536.75, with a yearly change of 30.41%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.