MasterCard Worldwide or MasterCard Incorporated (MA) is a well-known international payment system, a transnational financial corporation that unites 22 thousand financial institutions in 210 countries of the world.
In recent quarters, MasterCard has demonstrated an excellent increase in financial performance, aided by a number of factors: a strong brand and the high prevalence of company cards, as well as a general increase in the popularity of electronic payments in the world.
MasterCard’s total revenue in Q1 2019 increased by 8.6% to $ 3.89 billion and surpassed analysts’ forecasts. The increase in revenue was due to an increase in the number of transactions using cards of the payment system by 17% to 19.2 billion, while the total volume of payments worldwide grew by 12% to $ 1.48 trillion. In total, as of the end of March, 2.54 billion cards under the MasterCard and Maestro brands were in circulation in the world, which is 6.9% more than a year ago.
MasterCard completed the first quarter with $ 7.17 billion in cash and short-term investments with a total debt of $ 6.30 billion. During the reporting period, the company generated an operating cash flow of $ 1.31 billion (an increase of 26.8% y / y) and sent $ 83 million to capex and redeemed 8.7 million of its own shares from the market for $ 1.82 billion. In addition, the company acquired another 2 million of its own shares for $ 467 million in April, while still having $ 4.5 billion at its disposal under the current buyback program. The quarterly dividend of 33 cents per share corresponds to a dividend yield of 0.5%.
There was a consensus among analysts regarding the positive trend of the company and the long-term growth of its assets. At the moment, MasterCard has in its arsenal an incredibly strong and growing brand, a constant increase in the volume of electronic payments and the wide distribution of cards.
MasterCard is one of the technology leaders in its industry, investing heavily in new products and introducing advanced technologies. In particular, the company pays special attention to the development of solutions for payment systems based on the increasingly popular Blockchain technology, expanding its presence in the cardless digital payments segment. In addition, with the help of investments in start-ups, MasterCard enters new market segments and strengthens existing positions.
MasterCard management has voiced quite optimistic medium-term forecasts and expects average annual revenue growth in the years 2019-2021. in the range of 10-15%. At the same time, the company intends to continue to pay great attention to profitability indicators and expect to keep operating profitability at a level not lower than 50%. Earnings per share during this period are expected to increase by an average of 15-20% per year.
From the point of view of technical analysis, on the daily chart MasterCard shares pushed away from the lower limit of the medium-term ascending channel, while bargaining above the 50-day moving average. We expect the formation of rise to the upper boundary of the channel, in the region of $ 270.