MASTERCARD INC - A (MA) Stock Fundamental Analysis
NYSE:MA - New York Stock Exchange, Inc. - US57636Q1040 - Common Stock - Currency: USD
Overall MA gets a fundamental rating of 7 out of 10. We evaluated MA against 101 industry peers in the Financial Services industry. MA has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, MA is valued expensive at the moment. These ratings could make MA a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year MA was profitable.
In the past year MA had a positive cash flow from operations.
MA had positive earnings in each of the past 5 years.
MA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MA's Return On Assets of 27.12% is amongst the best of the industry. MA outperforms 100.00% of its industry peers.
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 has a Return On Invested Capital of 46.34%. This is amongst the best in the industry. MA outperforms 99.01% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MA is significantly above the industry average of 11.69%.
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's Profit Margin of 45.21% is amongst the best of the industry. MA outperforms 91.09% of its industry peers.
In the last couple of years the Profit Margin of MA has remained more or less at the same level.
Looking at the Operating Margin, with a value of 58.69%, MA belongs to the top of the industry, outperforming 90.10% of the companies in the same industry.
MA's Operating Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MA is creating value.
The number of shares outstanding for MA has been reduced compared to 1 year ago.
The number of shares outstanding for MA has been reduced compared to 5 years ago.
The debt/assets ratio for MA is higher compared to a year ago.
2.2 Solvency
MA has an Altman-Z score of 11.45. This indicates that MA is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.45, MA belongs to the top of the industry, outperforming 95.05% of the companies in the same industry.
MA has a debt to FCF ratio of 1.31. This is a very positive value and a sign of high solvency as it would only need 1.31 years to pay back of all of its debts.
The Debt to FCF ratio of MA (1.31) is better than 80.20% of its industry peers.
MA has a Debt/Equity ratio of 2.82. This is a high value indicating a heavy dependency on external financing.
MA has a worse Debt to Equity ratio (2.82) than 72.28% 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 | 11.45 |
ROIC/WACC5.14
WACC9.02%
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.
With a Current ratio value of 1.11, MA perfoms like the industry average, outperforming 55.45% of the companies in the same industry.
MA has a Quick 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.
Looking at the Quick ratio, with a value of 1.11, MA is in line with its industry, outperforming 57.43% of the companies in the same industry.
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
MA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.70%, which is quite good.
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.
MA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.78% yearly.
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
The Earnings Per Share is expected to grow by 15.30% on average over the next years. This is quite good.
Based on estimates for the next years, MA will show a quite strong growth in Revenue. The Revenue will grow by 12.56% on average per year.
EPS Next Y12.29%
EPS Next 2Y14.47%
EPS Next 3Y15.2%
EPS Next 5Y15.3%
Revenue Next Year13.67%
Revenue Next 2Y12.82%
Revenue Next 3Y12.56%
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
MA is valuated quite expensively with a Price/Earnings ratio of 37.50.
Compared to the rest of the industry, the Price/Earnings ratio of MA indicates a slightly more expensive valuation: MA is more expensive than 73.27% of the companies listed in the same industry.
MA's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 25.82.
The Price/Forward Earnings ratio is 29.44, which means the current valuation is very expensive for MA.
Based on the Price/Forward Earnings ratio, MA is valued a bit more expensive than the industry average as 71.29% of the companies are valued more cheaply.
MA is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.5 | ||
| Fwd PE | 29.44 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MA.
The rest of the industry has a similar Price/Free Cash Flow ratio as MA.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.89 | ||
| EV/EBITDA | 29.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MA does not grow enough to justify the current Price/Earnings ratio.
MA has an outstanding profitability rating, which may justify a higher PE ratio.
MA's earnings are expected to grow with 15.20% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.05
PEG (5Y)2.79
EPS Next 2Y14.47%
EPS Next 3Y15.2%
5. Dividend
5.1 Amount
MA has a yearly dividend return of 0.52%, which is pretty low.
MA's Dividend Yield is comparable with the industry average which is at 4.87.
Compared to an average S&P500 Dividend Yield of 2.36, MA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
5.2 History
The dividend of MA is nicely growing with an annual growth rate of 14.95%!
MA has paid a dividend for at least 10 years, which is a reliable track record.
MA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.95%
Div Incr Years12
Div Non Decr Years17
5.3 Sustainability
MA pays out 19.22% of its income as dividend. This is a sustainable payout ratio.
MA's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP19.22%
EPS Next 2Y14.47%
EPS Next 3Y15.2%
563.58
-6.56 (-1.15%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners89.97%
Inst Owner Change1.14%
Ins Owners0.05%
Ins Owner Change0.06%
Market Cap513.82B
Analysts80.41
Price Target628.31 (11.49%)
Short Float %0.63%
Short Ratio1.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
Yearly Dividend2.65
Dividend Growth(5Y)14.95%
DP19.22%
Div Incr Years12
Div Non Decr Years17
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)-0.05%
PT rev (3m)8.25%
EPS NQ rev (1m)1.73%
EPS NQ rev (3m)1.8%
EPS NY rev (1m)0.29%
EPS NY rev (3m)0.35%
Revenue NQ rev (1m)2.25%
Revenue NQ rev (3m)2.26%
Revenue NY rev (1m)1.16%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.5 | ||
| Fwd PE | 29.44 | ||
| P/S | 17.68 | ||
| P/FCF | 35.89 | ||
| P/OCF | 33.18 | ||
| P/B | 77.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | 29.44 |
EPS(TTM)15.03
EY2.67%
EPS(NY)19.14
Fwd EY3.4%
FCF(TTM)15.7
FCFY2.79%
OCF(TTM)16.99
OCFY3.01%
SpS31.88
BVpS7.32
TBVpS-9.01
PEG (NY)3.05
PEG (5Y)2.79
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 | 11.45 |
F-Score5
WACC9.02%
ROIC/WACC5.14
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 Y12.29%
EPS Next 2Y14.47%
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 2Y12.82%
Revenue Next 3Y12.56%
Revenue Next 5YN/A
EBIT growth 1Y13.54%
EBIT growth 3Y16.72%
EBIT growth 5Y10.81%
EBIT Next Year18.72%
EBIT Next 3Y15.16%
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%