In some instances, this happens because the sponsor has no intention at all to really provide the intended and rightful job to the migrant worker as intended in the visa. Rather, the migrant worker is “released” into the black market to earn a living in exchange for financially compensating the sponsor. Of course, you could just go to Visa’s website, where it plainly states it is a global payments technology company. The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month.

Visa is a top blue chip stock with incredible future growth prospects. It’s possible that if we enter a recession this year, its stock price will level off. However, it has shown resilience so far despite the economy, and over the long term, it should continue to create outsized shareholder wealth.

Visa’s non-GAAP net margin expanded 2.4 percentage points year over year to 53.7% in FY 2021, which is what propelled the company’s non-GAAP EPS 17.3% higher to $5.91 for the full-year. The difference is reflected in the performance of the stocks over the past decade or so. Compare that to the growth of American Express, where revenue is expected to grow to $35.99 billion from $32.74 billion, a top-line growth rate of only 10 percent. Any recent changes to analyst estimates for Visa should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Visa’s trailing annual dividend yield of just under 0.7% is higher than its 13-year median yield slightly above 0.6%, which indicates that the stock could be an attractive buy for growth-oriented investors. And while shareholders wait for the market to award Visa with a higher valuation multiple, they can collect a safe and fast-growing 0.8% dividend yield. Visa performed well in its previous fiscal year and looks set up to do that once again in the current fiscal year. But is the company in a position to easily cover its interest expenses with earnings before interest and taxes (EBIT)? Let’s dig into Visa’s interest coverage ratio to answer this question.

It trades at 33 times trailing 12-month earnings at the current price, which is slightly on the cheaper side of where it typically trades. However, its track record of revenue growth, earnings growth, and cash generation make its stock worth a premium. Visa has a robust share buyback program, and it repurchased 15.6 million shares in the 2023 first quarter alone at a total cost of $3.1 billion. Visa Incorporated operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions.

Visa has a set of rules that govern the participation of financial institutions in its payment system. Acquiring banks are responsible for ensuring that their merchants comply with the rules. An elevated interest coverage ratio such as Visa’s suggests that the company faces minimal risk of being unable to service its debt, regardless of the operating environment that it may find itself in. Thus, investors considering purchasing the stock can be reasonably confident that their investment likely won’t go bankrupt or “go to zero” in their lifetime. Payment-processing stock Visa (V -0.60%) put investors on notice in late-October when it declared a 17.2% increase in its quarterly dividend from $0.32 to $0.375 per share. Let’s take a look at a few reasons why Visa’s board of directors were comfortable enough to authorize a huge dividend increase, as well as whether the stock is a buy at its current valuation.

A beaten-down growth stock

In the United Kingdom, Mastercard has reduced its interchange fees while it is under investigation by the Office of Fair Trading. The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. In the latest market close, Visa (V Quick QuoteV – Free Report) reached $280.56, with a +0.19% movement compared to the previous day.

Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendation made during the past twelve months. While COVID vaccines only widely became available in the third quarter of its FY ’21, Visa recorded double-digit net revenue and non-GAAP earnings per share (EPS) growth compared to FY ’20. Visa trading refers to a situation where a migrant is sponsored for a specific job or position. This is because the sponsor has unofficially “traded” or “sold” the worker’s visa to another sponsor, whom the worker now informally answers to. In 2002, the European Commission exempted Visa’s multilateral interchange fees from Article 81 of the EC Treaty that prohibits anti-competitive arrangements.[94] However, this exemption expired on December 31, 2007.

The stock outperformed the S&P 500, which registered a daily loss of 0.11%. On the other hand, the Dow registered a gain of 0.12%, and the technology-centric Nasdaq decreased by 0.41%. CEO Al Kelly said that Visa is investing in value-added services to meet demand and feels that Visa is well-positioned to keep growing.

Visa Foundation

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.90 per share and a revenue of $35.7 billion, indicating changes of +12.88% and +9.35%, respectively, from the former year. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. What we’re seeing at the moment is that Visa is doing better than the broader economy.

1. For the fiscal year 2022, Visa reported earnings of US$14.96 billion, with an annual revenue of US$29.31 billion, an increase of 21.6% over the previous fiscal cycle.
2. Visa has a robust share buyback program, and it repurchased 15.6 million shares in the 2023 first quarter alone at a total cost of $3.1 billion.
3. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors.
4. In some instances, this happens because the sponsor has no intention at all to really provide the intended and rightful job to the migrant worker as intended in the visa.
5. Visa’s net revenue increased 10.3% year over year to $24.11 billion in FY ’21, which was driven by across-the-board increases in its business.

Today, cards may be co-branded with various merchants, airlines, etc., and marketed as “reward cards”. In the UK the law was changed in January 2018 to prevent retailers from adding a surcharge to a transaction as per ‘The Consumer Rights (Payment Surcharges) Regulations 2012’. It’s also important to note that V currently trades at a PEG ratio of 1.93. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. As the market closed yesterday, the Financial Transaction Services industry was having an average PEG ratio of 1.15.

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Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks https://www.tradebot.online/ is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.

Nasdaq 100 Stocks to Buy Before Earnings and Hold Forever

Kelly is retiring from the CEO role this week, with Visa president Ryan McInerney taking over on Feb. 1. These types of CEO transitions, where the company is well-established and the new CEO has a long history with the company, don’t usually make any waves. But it will still be interesting to see if McInerney takes Visa in any unexpected directions. It plows a big chunk of those profits back into developing its business and creating shareholder value through share buybacks and dividends (more on that later). Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. On top of Visa’s net revenue growth, the company was more profitable in FY 2021.

For one, payments volumes — the dollar amount of transactions processed by the company — grew by 16% year over year during the fiscal year. Secondly, total cross-border volumes — or volumes where the issuing country is different from the merchant country — climbed 9% over the previous fiscal year. Finally, Visa’s processed transactions – the total number of transactions processed by the business — surged 17% higher year over year. For the fiscal year 2022, Visa reported earnings of US$14.96 billion, with an annual revenue of US$29.31 billion, an increase of 21.6% over the previous fiscal cycle.

It endured a setback (along with the rest of the economy) at the beginning of the pandemic when people stayed home and restricted spending. But it rebounded strongly and it’s still demonstrating healthy double-digit percentage growth while increased inflation and rising interest rates to combat that inflation has somewhat slowed the broader economy. Michael Kramer and the clients of Mott Capital Management LLC own shares of V,MA,GOOG. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days.

Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management LLC, a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.