Mastercard Stock in 5 Charts

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A person pointing to a rising line on a chart.

Image source: Getty Images.

Mastercard ‘s (NYSE: MA) business is booming .

The following charts tell the story.

The relentless growth of e-commerce

US E-Commerce Sales Chart

US E-Commerce Sales data by YCharts

Few businesses are benefiting as much as Mastercard from the torrid growth of online sales. As one of the largest credit card networks, Mastercard is particularly well positioned to profit from the massive global shift toward digital payments and away from cash transactions.

Steadily rising revenue

Mastercard's revenue rose to $11.9 billion over the last year, up from $7.4 billion in 2012.

Data source: Morningstar. Chart by author.

Mastercard earns a small fee from every transaction that passes through its payment network, and its tollbooth-like business model produces a steadily rising stream of high-margin revenue.

Surging profits

Mastercard's operating and net income rose to $6.5 billion and $4.6 billion, respectively, over the last year, up from $3.9 billion and $2.8 billion in 2012.

Data source: Morningstar. Chart by author.

Mastercard is an incredibly profitable business. Over the trailing 12 months, the payments titan produced operating and net margins of 54% and 39%, respectively.

Strong cash generation

Mastercard's operating and free cash flow rose to $4.7 billion and $4.3 billion, respectively, over the last year, up from $2.9 billion and $2.7 billion in 2012.

Data source: Morningstar. Chart by author.

Mastercard’s asset-light business model requires minimal capital expenditures; it can add new merchants and cardholders to its network at little incremental cost. As such, Mastercard excels at turning its revenue into bountiful free cash flow .

Capital returns

MA Average Diluted Shares Outstanding (Quarterly) Chart

MA Average Diluted Shares Outstanding (Quarterly) data by YCharts

Mastercard is committed to passing a sizable portion of its cash flow on to its investors through share repurchases and a growing dividend.

Although Mastercard currently yields only 0.6%, that’s mostly a reflection of its surging share price. The payments giant has boosted its cash dividend payout at a rapid rate over the past half-decade — a trend that should continue in the years ahead.

Looking forward

With powerful macroeconomic trends fueling Mastercard’s revenue, profit, cash flow, and dividend growth, investors can expect the payment titan to deliver solid even more gains in the coming years.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Mastercard. The Motley Fool has a disclosure policy .


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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