Riding on steady growth momentum, the shares of
) reached its all-time high at $205.13 on Dec 2. The global
payment processor's shares rose about 33% since the beginning of
The improved momentum of this Zacks Rank #3 (Hold) stock is
driven by improved core fundamentals coupled with expense
control. Visa delivered positive earnings surprise in all of the
last 4 quarters with an average beat of 4.5%.
Yesterday's closing price represents a strong one-year return
of about 37% and a year-to-date return of about 35.3%. On both
these grounds, the company outperformed the S&P 500 index of
27.2% and 26.3%, respectively during the same period. Average
volume of shares traded over the last three months stands at
On Oct 30, Visa reported fiscal fourth-quarter 2013 operating
earnings per share of $1.85, in line with the Zacks Consensus
Estimate. The results however, outpaced the prior-year quarter
figure of $1.54 per share.
Results reflected about 9% growth in total revenue against
mere 1% increase in total expenses. Higher processed
transactions, driven by improved card spending, and cross border
volumes shored up the margins and capital returns.
Overall, Visa fared well in fiscal full-year 2013, despite the
regulatory uncertainties and higher-than-expected litigation
charges. With nil long-term debt and surplus cash and investments
position, the company enjoys a strong capital position. A
diversified business portfolio and effective marketing efforts
also raise optimism for strong operating leverage in the long
Furthermore, an efficient capital deployment, reflected by
Visa's incremental share buybacks and the latest 21.2% hike in
dividends, will continue to instil investors' confidence in the
Further, valuation looks compelling for Visa stock. The shares
are trading at 2% premium to the peer group average on a forward
price-to-earnings basis and 62% premium on a price-to-book basis.
While return on equity of 18.1% is at par with the peer group
average, return on assets of 13.8% stands well above the peer
group average of 7.2%. Even estimated long-term earnings growth
is pegged at 17.5%, higher than the peer group average of
Meanwhile, some better-ranked financial stocks include
Global Payments Inc.
Higher One Holdings Inc.
). All these stocks sport a Zacks Rank #2 (Buy).
GLOBAL PAYMENTS (GPN): Free Stock Analysis
HIGHER ONE HLDG (ONE): Free Stock Analysis
VISA INC-A (V): Free Stock Analysis Report
XOOM CORP (XOOM): Free Stock Analysis Report
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