VISA INC-CLASS A SHARES (V) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:V - US92826C8394 - Common Stock
326.905 USD
+1.64 (+0.51%)
V gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 97 industry peers in the Financial Services industry. V scores excellent points on both the profitability and health parts. This is a solid base for a good stock. While showing a medium growth rate, V is valued expensive at the moment. These ratings could make V a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
- V had positive earnings in the past year.
- V had a positive operating cash flow in the past year.
- In the past 5 years V has always been profitable.
- V had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- V's Return On Assets of 19.93% is amongst the best of the industry. V outperforms 96.91% of its industry peers.
- The Return On Equity of V (52.38%) is better than 95.88% of its industry peers.
- V has a better Return On Invested Capital (34.02%) than 97.94% of its industry peers.
- V had an Average Return On Invested Capital over the past 3 years of 30.07%. This is significantly above the industry average of 8.46%.
- The last Return On Invested Capital (34.02%) for V is above the 3 year average (30.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.93% | ||
| ROE | 52.38% | ||
| ROIC | 34.02% |
ROA(3y)19.76%
ROA(5y)18.18%
ROE(3y)48.65%
ROE(5y)43.8%
ROIC(3y)30.07%
ROIC(5y)26.99%
1.3 Margins
- V has a Profit Margin of 49.64%. This is amongst the best in the industry. V outperforms 90.72% of its industry peers.
- V's Profit Margin has been stable in the last couple of years.
- With an excellent Operating Margin value of 66.39%, V belongs to the best of the industry, outperforming 90.72% of the companies in the same industry.
- In the last couple of years the Operating Margin of V has remained more or less at the same level.
- V's Gross Margin of 80.36% is amongst the best of the industry. V outperforms 84.54% of its industry peers.
- V's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 66.39% | ||
| PM (TTM) | 49.64% | ||
| GM | 80.36% |
OM growth 3Y-0.48%
OM growth 5Y0.58%
PM growth 3Y-0.19%
PM growth 5Y0.69%
GM growth 3Y-0.07%
GM growth 5Y0.25%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), V is creating value.
- Compared to 1 year ago, V has less shares outstanding
- The number of shares outstanding for V has been reduced compared to 5 years ago.
- Compared to 1 year ago, V has a worse debt to assets ratio.
2.2 Solvency
- V has an Altman-Z score of 7.58. This indicates that V is financially healthy and has little risk of bankruptcy at the moment.
- V's Altman-Z score of 7.58 is amongst the best of the industry. V outperforms 90.72% of its industry peers.
- V has a debt to FCF ratio of 1.17. This is a very positive value and a sign of high solvency as it would only need 1.17 years to pay back of all of its debts.
- V has a Debt to FCF ratio of 1.17. This is in the better half of the industry: V outperforms 77.32% of its industry peers.
- A Debt/Equity ratio of 0.52 indicates that V is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.52, V is in line with its industry, outperforming 56.70% of the companies in the same industry.
- Although V 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 | 0.52 | ||
| Debt/FCF | 1.17 | ||
| Altman-Z | 7.58 |
ROIC/WACC3.95
WACC8.62%
2.3 Liquidity
- A Current Ratio of 1.08 indicates that V should not have too much problems paying its short term obligations.
- V has a Current ratio (1.08) which is comparable to the rest of the industry.
- V has a Quick Ratio of 1.08. This is a normal value and indicates that V is financially healthy and should not expect problems in meeting its short term obligations.
- V has a Quick ratio (1.08) which is in line with its industry peers.
- The current and quick ratio evaluation for V 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 | 1.08 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 14.13% over the past year.
- Measured over the past years, V shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.92% on average per year.
- V shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.34%.
- V shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.86% yearly.
EPS 1Y (TTM)14.13%
EPS 3Y15.16%
EPS 5Y17.92%
EPS Q2Q%9.96%
Revenue 1Y (TTM)11.34%
Revenue growth 3Y10.92%
Revenue growth 5Y12.86%
Sales Q2Q%11.51%
3.2 Future
- Based on estimates for the next years, V will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.16% on average per year.
- The Revenue is expected to grow by 10.38% on average over the next years. This is quite good.
EPS Next Y13.7%
EPS Next 2Y13.29%
EPS Next 3Y12.87%
EPS Next 5Y13.16%
Revenue Next Year11.48%
Revenue Next 2Y10.84%
Revenue Next 3Y10.38%
Revenue Next 5YN/A
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- 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
- The Price/Earnings ratio is 28.50, which means the current valuation is very expensive for V.
- Based on the Price/Earnings ratio, V is valued a bit more expensive than the industry average as 65.98% of the companies are valued more cheaply.
- The average S&P500 Price/Earnings ratio is at 28.82. V is around the same levels.
- The Price/Forward Earnings ratio is 25.07, which means the current valuation is very expensive for V.
- V's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. V is more expensive than 64.95% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, V is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.5 | ||
| Fwd PE | 25.07 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as V.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of V is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29 | ||
| EV/EBITDA | 22.57 |
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 V may justify a higher PE ratio.
- V's earnings are expected to grow with 12.87% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.08
PEG (5Y)1.59
EPS Next 2Y13.29%
EPS Next 3Y12.87%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.82%, V is not a good candidate for dividend investing.
- V's Dividend Yield is comparable with the industry average which is at 2.09.
- Compared to an average S&P500 Dividend Yield of 1.82, V's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
- On average, the dividend of V grows each year by 13.82%, which is quite nice.
- V has paid a dividend for at least 10 years, which is a reliable track record.
- V has decreased its dividend recently.
Dividend Growth(5Y)13.82%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 23.34% of the earnings are spent on dividend by V. This is a low number and sustainable payout ratio.
- The dividend of V is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP23.34%
EPS Next 2Y13.29%
EPS Next 3Y12.87%
VISA INC-CLASS A SHARES / V FAQ
What is the ChartMill fundamental rating of VISA INC-CLASS A SHARES (V) stock?
ChartMill assigns a fundamental rating of 7 / 10 to V.
Can you provide the valuation status for VISA INC-CLASS A SHARES?
ChartMill assigns a valuation rating of 2 / 10 to VISA INC-CLASS A SHARES (V). This can be considered as Overvalued.
Can you provide the profitability details for VISA INC-CLASS A SHARES?
VISA INC-CLASS A SHARES (V) has a profitability rating of 9 / 10.
What are the PE and PB ratios of VISA INC-CLASS A SHARES (V) stock?
The Price/Earnings (PE) ratio for VISA INC-CLASS A SHARES (V) is 28.5 and the Price/Book (PB) ratio is 16.51.
How sustainable is the dividend of VISA INC-CLASS A SHARES (V) stock?
The dividend rating of VISA INC-CLASS A SHARES (V) is 4 / 10 and the dividend payout ratio is 23.34%.