MASTERCARD INC - A (MA) Stock Fundamental Analysis
NYSE:MA - New York Stock Exchange, Inc. - US57636Q1040 - Common Stock - Currency: USD
Taking everything into account, MA scores 6 out of 10 in our fundamental rating. MA was compared to 100 industry peers in the Financial Services industry. MA scores excellent points on both the profitability and health parts. This is a solid base for a good stock. MA is quite expensive at the moment. It does show a decent growth rate. This makes MA very considerable for quality investing!
1. Profitability
1.1 Basic Checks
MA had positive earnings in the past year.
MA had a positive operating cash flow in the past year.
Each year in the past 5 years MA has been profitable.
In the past 5 years MA always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 27.12%, MA belongs to the top of the industry, outperforming 99.00% of the companies in the same industry.
With an excellent Return On Equity value of 197.02%, MA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
MA's Return On Invested Capital of 46.34% is amongst the best of the industry. MA outperforms 98.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MA is significantly above the industry average of 11.84%.
The last Return On Invested Capital (46.34%) for MA is above the 3 year average (45.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 27.12% | ||
| ROE | 197.02% | ||
| ROIC | 46.34% |
ROA(3y)26.26%
ROA(5y)24.19%
ROE(3y)172.59%
ROE(5y)147.38%
ROIC(3y)45.59%
ROIC(5y)40.55%
1.3 Margins
MA has a Profit Margin of 45.21%. This is amongst the best in the industry. MA outperforms 91.00% of its industry peers.
In the last couple of years the Profit Margin of MA has remained more or less at the same level.
With an excellent Operating Margin value of 58.69%, MA belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 58.69% | ||
| PM (TTM) | 45.21% | ||
| GM | N/A |
OM growth 3Y2.16%
OM growth 5Y0.03%
PM growth 3Y-0.21%
PM growth 5Y-1.01%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MA is creating value.
Compared to 1 year ago, MA has less shares outstanding
The number of shares outstanding for MA has been reduced compared to 5 years ago.
MA has a worse debt/assets ratio than last year.
2.2 Solvency
MA has an Altman-Z score of 11.23. This indicates that MA is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 11.23, MA belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
The Debt to FCF ratio of MA is 1.31, which is an excellent value as it means it would take MA, only 1.31 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.31, MA is in the better half of the industry, outperforming 79.00% of the companies in the same industry.
MA has a Debt/Equity ratio of 2.82. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of MA (2.82) is worse than 72.00% of its industry peers.
Even though the debt/equity ratio score it not favorable for MA, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.82 | ||
| Debt/FCF | 1.31 | ||
| Altman-Z | 11.23 |
ROIC/WACC5.18
WACC8.95%
2.3 Liquidity
MA has a Current Ratio of 1.11. This is a normal value and indicates that MA is financially healthy and should not expect problems in meeting its short term obligations.
MA's Current ratio of 1.11 is in line compared to the rest of the industry. MA outperforms 54.00% of its industry peers.
A Quick Ratio of 1.11 indicates that MA should not have too much problems paying its short term obligations.
MA has a Quick ratio (1.11) which is in line with its industry peers.
MA does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.70% over the past year.
The Earnings Per Share has been growing by 13.43% on average over the past years. This is quite good.
Looking at the last year, MA shows a quite strong growth in Revenue. The Revenue has grown by 13.12% in the last year.
Measured over the past years, MA shows a quite strong growth in Revenue. The Revenue has been growing by 10.78% on average per year.
EPS 1Y (TTM)17.7%
EPS 3Y20.21%
EPS 5Y13.43%
EPS Q2Q%12.69%
Revenue 1Y (TTM)13.12%
Revenue growth 3Y14.26%
Revenue growth 5Y10.78%
Sales Q2Q%14.21%
3.2 Future
MA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.30% yearly.
Based on estimates for the next years, MA will show a quite strong growth in Revenue. The Revenue will grow by 12.47% on average per year.
EPS Next Y12.34%
EPS Next 2Y14.46%
EPS Next 3Y15.2%
EPS Next 5Y15.3%
Revenue Next Year13.67%
Revenue Next 2Y12.73%
Revenue Next 3Y12.47%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 36.77 indicates a quite expensive valuation of MA.
Based on the Price/Earnings ratio, MA is valued a bit more expensive than the industry average as 73.00% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.50. MA is valued slightly more expensive when compared to this.
MA is valuated quite expensively with a Price/Forward Earnings ratio of 28.88.
Based on the Price/Forward Earnings ratio, MA is valued a bit more expensive than 73.00% of the companies in the same industry.
MA is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.77 | ||
| Fwd PE | 28.88 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MA.
MA's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.06 | ||
| EV/EBITDA | 28.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MA may justify a higher PE ratio.
A more expensive valuation may be justified as MA's earnings are expected to grow with 15.20% in the coming years.
PEG (NY)2.98
PEG (5Y)2.74
EPS Next 2Y14.46%
EPS Next 3Y15.2%
5. Dividend
5.1 Amount
With a yearly dividend of 0.54%, MA is not a good candidate for dividend investing.
MA's Dividend Yield is comparable with the industry average which is at 4.86.
Compared to an average S&P500 Dividend Yield of 2.35, MA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
5.2 History
The dividend of MA is nicely growing with an annual growth rate of 14.95%!
MA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)14.95%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
19.22% of the earnings are spent on dividend by MA. This is a low number and sustainable payout ratio.
The dividend of MA is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP19.22%
EPS Next 2Y14.46%
EPS Next 3Y15.2%
552.66
-2.95 (-0.53%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners90.17%
Inst Owner Change-0.03%
Ins Owners0.05%
Ins Owner Change0.06%
Market Cap501.84B
Analysts80
Price Target635.7 (15.03%)
Short Float %0.56%
Short Ratio1.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
Yearly Dividend2.65
Dividend Growth(5Y)14.95%
DP19.22%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.9%
Min EPS beat(2)0.38%
Max EPS beat(2)1.41%
EPS beat(4)3
Avg EPS beat(4)0.48%
Min EPS beat(4)-0.82%
Max EPS beat(4)1.41%
EPS beat(8)5
Avg EPS beat(8)0.41%
EPS beat(12)8
Avg EPS beat(12)0.84%
EPS beat(16)12
Avg EPS beat(16)3.14%
Revenue beat(2)0
Avg Revenue beat(2)-1.34%
Min Revenue beat(2)-1.55%
Max Revenue beat(2)-1.13%
Revenue beat(4)0
Avg Revenue beat(4)-1.39%
Min Revenue beat(4)-1.59%
Max Revenue beat(4)-1.13%
Revenue beat(8)0
Avg Revenue beat(8)-1.81%
Revenue beat(12)1
Avg Revenue beat(12)-1.47%
Revenue beat(16)3
Avg Revenue beat(16)-1.18%
PT rev (1m)0.32%
PT rev (3m)1.12%
EPS NQ rev (1m)-0.16%
EPS NQ rev (3m)1.64%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)2.18%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.77 | ||
| Fwd PE | 28.88 | ||
| P/S | 17.26 | ||
| P/FCF | 35.06 | ||
| P/OCF | 32.4 | ||
| P/B | 75.23 | ||
| P/tB | N/A | ||
| EV/EBITDA | 28.59 |
EPS(TTM)15.03
EY2.72%
EPS(NY)19.14
Fwd EY3.46%
FCF(TTM)15.76
FCFY2.85%
OCF(TTM)17.06
OCFY3.09%
SpS32.01
BVpS7.35
TBVpS-9.05
PEG (NY)2.98
PEG (5Y)2.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 27.12% | ||
| ROE | 197.02% | ||
| ROCE | 55.68% | ||
| ROIC | 46.34% | ||
| ROICexc | 62.43% | ||
| ROICexgc | 180.6% | ||
| OM | 58.69% | ||
| PM (TTM) | 45.21% | ||
| GM | N/A | ||
| FCFM | 49.24% |
ROA(3y)26.26%
ROA(5y)24.19%
ROE(3y)172.59%
ROE(5y)147.38%
ROIC(3y)45.59%
ROIC(5y)40.55%
ROICexc(3y)67.03%
ROICexc(5y)62.66%
ROICexgc(3y)221.66%
ROICexgc(5y)195.93%
ROCE(3y)54.77%
ROCE(5y)48.72%
ROICexcg growth 3Y15.54%
ROICexcg growth 5Y5.3%
ROICexc growth 3Y9.56%
ROICexc growth 5Y-4.29%
OM growth 3Y2.16%
OM growth 5Y0.03%
PM growth 3Y-0.21%
PM growth 5Y-1.01%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.82 | ||
| Debt/FCF | 1.31 | ||
| Debt/EBITDA | 1.04 | ||
| Cap/Depr | 122.7% | ||
| Cap/Sales | 4.04% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 85.97% | ||
| Profit Quality | 108.92% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 11.23 |
F-Score5
WACC8.95%
ROIC/WACC5.18
Cap/Depr(3y)138.52%
Cap/Depr(5y)129.95%
Cap/Sales(3y)4.5%
Cap/Sales(5y)4.49%
Profit Quality(3y)101.51%
Profit Quality(5y)101.14%
High Growth Momentum
Growth
EPS 1Y (TTM)17.7%
EPS 3Y20.21%
EPS 5Y13.43%
EPS Q2Q%12.69%
EPS Next Y12.34%
EPS Next 2Y14.46%
EPS Next 3Y15.2%
EPS Next 5Y15.3%
Revenue 1Y (TTM)13.12%
Revenue growth 3Y14.26%
Revenue growth 5Y10.78%
Sales Q2Q%14.21%
Revenue Next Year13.67%
Revenue Next 2Y12.73%
Revenue Next 3Y12.47%
Revenue Next 5YN/A
EBIT growth 1Y13.54%
EBIT growth 3Y16.72%
EBIT growth 5Y10.81%
EBIT Next Year20.33%
EBIT Next 3Y15.47%
EBIT Next 5Y13.73%
FCF growth 1Y40.66%
FCF growth 3Y16.25%
FCF growth 5Y12.75%
OCF growth 1Y36.67%
OCF growth 3Y16.02%
OCF growth 5Y12.55%