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 99 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 would make MA suitable 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.
Each year in the past 5 years MA had a positive operating cash flow.
1.2 Ratios
MA has a better Return On Assets (27.12%) than 98.99% of its industry peers.
MA's Return On Equity of 197.02% is amongst the best of the industry. MA outperforms 100.00% of its industry peers.
MA has a better Return On Invested Capital (46.34%) than 97.98% of its industry peers.
MA had an Average Return On Invested Capital over the past 3 years of 45.59%. This is significantly above the industry average of 11.83%.
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 better Profit Margin (45.21%) than 90.91% of its industry peers.
MA's Profit Margin has been stable in the last couple of years.
MA has a Operating Margin of 58.69%. This is amongst the best in the industry. MA outperforms 89.90% of its industry peers.
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
MA has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, MA has less shares outstanding
Compared to 5 years ago, MA has less shares outstanding
Compared to 1 year ago, MA has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 11.67 indicates that MA is not in any danger for bankruptcy at the moment.
MA has a Altman-Z score of 11.67. This is amongst the best in the industry. MA outperforms 92.93% of its industry peers.
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.
MA's Debt to FCF ratio of 1.31 is fine compared to the rest of the industry. MA outperforms 78.79% of its industry peers.
A Debt/Equity ratio of 2.82 is on the high side and indicates that MA has dependencies on debt financing.
MA has a Debt to Equity ratio of 2.82. This is in the lower half of the industry: MA underperforms 71.72% of its industry peers.
Although MA does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.82 | ||
| Debt/FCF | 1.31 | ||
| Altman-Z | 11.67 |
ROIC/WACC5.21
WACC8.9%
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 has a Current ratio (1.11) which is comparable to the rest of the industry.
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 comparable to the rest of the industry.
The current and quick ratio evaluation for MA is rather negative, while it does have 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.
MA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.43% yearly.
MA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.12%.
The Revenue has been growing by 10.78% on average over the past years. This is quite good.
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.
MA is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.52% yearly.
EPS Next Y12.29%
EPS Next 2Y14.47%
EPS Next 3Y15.2%
EPS Next 5Y15.3%
Revenue Next Year13.68%
Revenue Next 2Y12.78%
Revenue Next 3Y12.52%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 39.21, the valuation of MA can be described as expensive.
Based on the Price/Earnings ratio, MA is valued a bit more expensive than 74.75% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.60, MA is valued a bit more expensive.
MA is valuated quite expensively with a Price/Forward Earnings ratio of 30.78.
Based on the Price/Forward Earnings ratio, MA is valued a bit more expensive than 73.74% of the companies in the same industry.
MA's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.21 | ||
| Fwd PE | 30.78 |
4.2 Price Multiples
MA's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as MA.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.38 | ||
| EV/EBITDA | 30.29 |
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.
A more expensive valuation may be justified as MA's earnings are expected to grow with 15.20% in the coming years.
PEG (NY)3.19
PEG (5Y)2.92
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 4.93.
With a Dividend Yield of 0.52, MA pays less dividend than the S&P500 average, which is at 2.39.
| 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 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
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%
589.28
-1.46 (-0.25%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners89.97%
Inst Owner Change1.21%
Ins Owners0.05%
Ins Owner Change0.06%
Market Cap535.10B
Analysts80.42
Price Target633.7 (7.54%)
Short Float %0.67%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
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)0.86%
PT rev (3m)1.06%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)1.87%
EPS NY rev (1m)0.29%
EPS NY rev (3m)0.35%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)2.22%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)1.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.21 | ||
| Fwd PE | 30.78 | ||
| P/S | 18.41 | ||
| P/FCF | 37.38 | ||
| P/OCF | 34.55 | ||
| P/B | 80.21 | ||
| P/tB | N/A | ||
| EV/EBITDA | 30.29 |
EPS(TTM)15.03
EY2.55%
EPS(NY)19.14
Fwd EY3.25%
FCF(TTM)15.76
FCFY2.68%
OCF(TTM)17.06
OCFY2.89%
SpS32.01
BVpS7.35
TBVpS-9.05
PEG (NY)3.19
PEG (5Y)2.92
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 | 11.67 |
F-Score5
WACC8.9%
ROIC/WACC5.21
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 Year13.68%
Revenue Next 2Y12.78%
Revenue Next 3Y12.52%
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%