Better Buy: Mastercard vs. Visa Stock
Mastercard (NYSE: MA) and Visa (NYSE: V) are two giants of the financial services world and account for a huge portion of the card-based payments market. Which stock will offer investors better bang for their buck? Read on for differing bull cases from two Motley Fool contributors.
Parkev Tatevosian: Visa has spent decades cultivating relationships with merchants and consumers. The result is a financial transaction network that spans the world. Instead of using cash for purchases, which can be cumbersome, time-consuming, and unsafe, consumers can whip out their Visa cards and pay instantly. That can partly explain why Visa's revenue has soared from $11.8 billion in 2013 to $29.3 billion in 2022.
Since much of the investment to build out the network was made decades ago, Visa's business is incredibly profitable now. Between 2013 and 2022, the company averaged an operating profit margin of 65.5%. You would be hard-pressed to find many companies with operating profit margins this high. The good news for investors is that competition in the industry is light. Its main rival, Mastercard, is not actively offering promotions or incentives, or undertaking expensive ad campaigns to take market share.
Source Fool.com
