On Mar 27, 2013, shares of
) hit a 52-week high of $540.73. The company reported
fourth-quarter results with a positive earnings surprise of
1.46%. MasterCard delivered positive earnings surprise in all 4
quarters of 2012 with an average beat of 2.11%. Further the
company delivered positive earnings surprise for 12
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On Feb 13, 2013, MasterCard reported its fourth-quarter net
earnings of $4.86, which exceeded the Zacks Consensus Estimate of
$4.79. Results were up 20.6% year over year from $4.03 earned in
the year-ago quarter. Lower share count led to the improvement.
MasterCard in a global diversification of operations engages in a
number of strategic partnerships. Among its endeavors to expand
its leadership in mobile payments, MasterCard partnered with
telecom giants like T-Mobile, Orange in Poland, Vodafone Italy,
NTT DOCOMO Inc., Turkcell, Everything Everywhere U.K and Deutsche
Telekom in 2012. Its partnership with Comviva, the mobile value
added service company, C-SAM and Flying Dove, the authorized
distributors for Sony Corporation in Nigeria in 2012 also boosted
its e-payment business.
Till date in 2013 the company announced collaborations with
Safran SA's Morpho, data analytics firm Mu Sigma, Equity Bank,
VimpelCom, eServ Global, Oltio, Itaú, TIM, Redecard, Gemalto and
Excentus to augment its multiple range of services. It also
expanded its contract with Intercontinental Hotels Group Plc.
Moreover in Feb 2013, the company declared a dividend of 30 cents
representing a 100% increase over the last paid dividend.
Additionally its board of directors authorized a $2 billion share
During its fourth-quarter earnings release, MasterCard guided its
2013-2015 revenue CAGR to be in the range of 11% to 14%. The
company expects to generate an annual operating margin of 50% and
earnings per share CAGR of at least 20%. The overall long-term
expected earnings growth rate for this stock is 16.72%.
However, valuation looks reasonable for MasterCard. The shares
are trading at a 36.1% and 161.5% premium to the peer group
average on a forward price-to-earnings basis and on a
price-to-book basis respectively. The return on equity is 95.3%
above the peer group average. Nevertheless, the 1-year return
from the stock is 26.9%, much above S&P 500's return of
MasterCard currently carries a Zacks Rank #3 (Hold). Among others
in the industry,
Alliance Data Systems Corporation
Total System Services Inc.
) carry a favorable Zacks Rank #2 (Buy) and are worth noting.