By
Tolu Ajiboye
May 10th, 2024
At the moment of writing, Visa stock is 3.69% up, $175.69 per share in the-premarket. Mastercard is also upgrading, making up $275.95 per share.
The world’s two largest payments companies Visa Inc (NYSE: V) and Mastercard Incorporated (NYSE: MA) seem to be undaunted by the coronavirus crisis. Both Visa and Mastercard stocks are up, allowing investors to believe they are the best buy now.
On Monday, Visa stock closed 11.58% up at $169.44. It went slightly down by 0.26% after hours, trading at $169.00. But it has already recovered today in the pre-market trading. At the moment of writing, Visa stock is 3.69% up, $175.69 per share.
Mastercard stock is also performing well. Yesterday, it added 12.23% to end at $265.94. After hours, it rose by another 0.023% up to $266.00. In pre-market today, Mastercard is also upgrading. At the moment of writing, it makes up $275.95 per share.
Why Visa and Mastercard are Worth Buying
According to many analysts, both Visa and Mastercard stocks are a good buy despite coronavirus. And here’s why.
Firstly, Visa and Mastercard, as well as American Express, PayPal, and Discover cards, are the dominant players in the US payments industry. In 2019, the two largest shares of the purchase volume were generated by Visa (60% of the volume) and Mastercard (26%).
Secondly, Visa and Mastercard are a major part of the payment processing as Internet purchases have reached an all-time high. Wall Street analysts do not expect their revenues to be as high as in 2019, but in the coronavirus hard times, profits will still be impressive.
Further, both Visa and Mastercard have significant growth opportunities and important partnerships. For example, Visa Token Service that replaces a consumer’s card-related sensitive information with a unique identifier and enables secure transactions without card or person is supported by Apple Pay, Google Pay, Netflix, Samsung Pay, Fitbit Pay, and Garmin pay.
Mastercard Track, B2B global trade platform powered by Microsoft Azure, is collaborating with Basware, BirchStreet, Coupa, the Infor GT Nexus Commerce Network, Ivalua, Jaggaer, Liaison Technologies, Tradeshift, and Tungsten Network.
In addition, both Visa and Mastercard have made a number of important acquisitions. In 2019 only, Mastercard acquired RiskRecon, SessionM, Transactis, Vyze, Ethoca, and Transfast. Visa’s list of acquisitions included Bell ID, Verifi, Payworks, and Rambus.
Coronavirus Risks
Both Mastercard and Visa are trying to grow beyond card transactions. And this is another reason to consider buying their stocks. However, there are several risks resulting from the unstable market in terms of coronavirus.
In an SEC filing, Visa said it expects the second fiscal quarter net revenue growth to be about 2.5–3.5 percentage points lower than the outlook shared in January. Mastercard revenue growth for the same period will also be lower than expected.
Visa and Mastercard, as well as any stocks in any industry, have already been impacted by the current pandemic. But in comparison with tech companies, Visa and Mastercard do not have to suspend their activities, as there is always a necessity to pay for something.