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MasterCard Achieves New 52-Week High - Analyst Blog

By: Zacks.com
Posted: 6/20/2013 12:10:00 PM
Referenced Stocks: GBL;HTH;MA;VNTV

Riding on a strong growth momentum, the shares of MasterCard Inc. ( MA ) reached a new 52-week high of $586.37 on Jun 19. This surpassed its previous high of $584.85 on May 21. This Zacks Rank #3 (Hold) stock surged about 37.2% in the last 52 weeks.

Particularly, this global electronic payment processor rose about 8.6% since the company reported its first-quarter 2013 results in the beginning of May with a positive earnings surprise of 0.65%.

Yesterday's closing price represents a strong one-year return of about 37.4% and a year-to-date return of about 21.4%. The S&P 500 index jumped 27.5% and 13.9%, respectively during the same period. Average volume of shares traded over the last three months stands at approximately 557.4K.

On May 1, MasterCard reported its first-quarter earnings per share of $6.23, which comfortably surpassed the Zacks Consensus Estimate of $6.19. However, the result significantly outperformed the year-ago quarter figure of $5.36 as well. The company delivered positive earnings surprise in all of the last 4 quarters, with an average beat of about 1.95%.

MasterCard's growth is driven by its diversified product basket, technology upgrades along with expansion into high-potential emerging regions through strategic acquisitions and alliances. Alongside, ample competitive leverage and a risk-free balance sheet generate incremental shareholder value via healthy and regular share buybacks and dividend payouts. At the current price, MasterCard's dividend yield stands at 0.41%.

Further, the valuation for MasterCard appears impressive. The shares are trading at a 33% premium to the peer group average on a forward price-to-earnings basis and 136% premium on a price-to-book basis. Return on equity of 42.5% and return on assets of 24.0% are way ahead of the peer group average of 21.6% and 9.5%, respectively. Even the estimated long-term earnings growth is pegged at 16.3%, higher than the peer group average of 13.0%.

Apart from MasterCard, other outperformers in the financial sector include Vantiv Inc. ( VNTV ), Hilltop Holdings Inc. ( HTH ) and Gamco Investors Inc. ( GBL ). All these stocks carry a Zacks Rank #1 (Strong Buy).



GAMCO INVESTORS (GBL): Free Stock Analysis Report

HILLTOP HLDGS (HTH): Free Stock Analysis Report

MASTERCARD INC (MA): Free Stock Analysis Report

VANTIV INC-A (VNTV): Free Stock Analysis Report

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