MASTERCARD INC - A (MA) Stock Fundamental Analysis
NYSE:MA - New York Stock Exchange, Inc. - US57636Q1040 - Common Stock - Currency: USD
MA gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 101 industry peers in the Financial Services industry. Both the health and profitability get an excellent rating, making MA a very profitable company, without any liquidiy or solvency issues. 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
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.
Each year in the past 5 years MA had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 26.78%, MA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 198.52%, MA belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 47.64%, MA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
MA had an Average Return On Invested Capital over the past 3 years of 45.59%. This is significantly above the industry average of 7.70%.
The last Return On Invested Capital (47.64%) for MA is above the 3 year average (45.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.78% | ||
| ROE | 198.52% | ||
| ROIC | 47.64% |
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
The Profit Margin of MA (45.71%) is better than 91.09% of its industry peers.
MA's Profit Margin has been stable in the last couple of years.
The Operating Margin of MA (58.64%) is better than 90.10% 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 | 58.64% | ||
| PM (TTM) | 45.71% | ||
| 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.
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.
Compared to 1 year ago, MA has a worse debt to assets ratio.
2.2 Solvency
MA has an Altman-Z score of 10.66. This indicates that MA is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MA (10.66) is better than 96.04% of its industry peers.
The Debt to FCF ratio of MA is 1.34, which is an excellent value as it means it would take MA, only 1.34 years of fcf income to pay off all of its debts.
MA has a Debt to FCF ratio of 1.34. This is amongst the best in the industry. MA outperforms 80.20% of its industry peers.
A Debt/Equity ratio of 2.69 is on the high side and indicates that MA has dependencies on debt financing.
MA's Debt to Equity ratio of 2.69 is on the low side compared to the rest of the industry. MA is outperformed by 74.26% 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 | 2.69 | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 10.66 |
ROIC/WACC5.41
WACC8.81%
2.3 Liquidity
A Current Ratio of 1.03 indicates that MA should not have too much problems paying its short term obligations.
With a Current ratio value of 1.03, MA perfoms like the industry average, outperforming 50.49% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that MA should not have too much problems paying its short term obligations.
MA's Quick ratio of 1.03 is in line compared to the rest of the industry. MA outperforms 53.47% of its industry peers.
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 | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.17% over the past year.
Measured over the past years, MA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.43% on average per year.
MA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.23%.
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)19.17%
EPS 3Y20.21%
EPS 5Y13.43%
EPS Q2Q%20.13%
Revenue 1Y (TTM)12.23%
Revenue growth 3Y14.26%
Revenue growth 5Y10.78%
Sales Q2Q%14.37%
3.2 Future
Based on estimates for the next years, MA will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.30% on average per year.
Based on estimates for the next years, MA will show a quite strong growth in Revenue. The Revenue will grow by 12.41% on average per year.
EPS Next Y11.91%
EPS Next 2Y14.76%
EPS Next 3Y15.39%
EPS Next 5Y15.3%
Revenue Next Year12.37%
Revenue Next 2Y12.43%
Revenue Next 3Y12.41%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 35.41, the valuation of MA can be described as expensive.
MA's Price/Earnings ratio is a bit more expensive when compared to the industry. MA is more expensive than 72.28% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. MA is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 31.64, the valuation of MA can be described as expensive.
Based on the Price/Forward Earnings ratio, MA is valued a bit more expensive than the industry average as 72.28% of the companies are valued more cheaply.
MA is valuated expensively when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.41 | ||
| Fwd PE | 31.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MA is valued a bit more expensive than 60.40% of the companies in the same industry.
MA's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.72 | ||
| EV/EBITDA | 27.61 |
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 15.39% in the coming years.
PEG (NY)2.97
PEG (5Y)2.64
EPS Next 2Y14.76%
EPS Next 3Y15.39%
5. Dividend
5.1 Amount
With a yearly dividend of 0.61%, MA is not a good candidate for dividend investing.
MA's Dividend Yield is comparable with the industry average which is at 4.63.
Compared to an average S&P500 Dividend Yield of 2.57, MA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.61% |
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.
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
19.02% of the earnings are spent on dividend by MA. This is a low number and 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.
DP19.02%
EPS Next 2Y14.76%
EPS Next 3Y15.39%
517.33
+3.9 (+0.76%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners89.97%
Inst Owner Change0.01%
Ins Owners0.05%
Ins Owner Change0.06%
Market Cap471.65B
Analysts82.08
Price Target628.65 (21.52%)
Short Float %0.57%
Short Ratio1.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.61% |
Yearly Dividend2.65
Dividend Growth(5Y)14.95%
DP19.02%
Div Incr Years12
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.67%
Min EPS beat(2)0.38%
Max EPS beat(2)0.96%
EPS beat(4)2
Avg EPS beat(4)-0.05%
Min EPS beat(4)-0.82%
Max EPS beat(4)0.96%
EPS beat(8)5
Avg EPS beat(8)0.24%
EPS beat(12)8
Avg EPS beat(12)2.69%
EPS beat(16)12
Avg EPS beat(16)3.53%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-1.59%
Max Revenue beat(2)-1.55%
Revenue beat(4)0
Avg Revenue beat(4)-1.8%
Min Revenue beat(4)-2.77%
Max Revenue beat(4)-1.3%
Revenue beat(8)0
Avg Revenue beat(8)-1.81%
Revenue beat(12)2
Avg Revenue beat(12)-1.19%
Revenue beat(16)4
Avg Revenue beat(16)-1.05%
PT rev (1m)0%
PT rev (3m)9.3%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)-2.82%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-2.64%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)-0.7%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.41 | ||
| Fwd PE | 31.64 | ||
| P/S | 16.74 | ||
| P/FCF | 34.72 | ||
| P/OCF | 31.91 | ||
| P/B | 72.73 | ||
| P/tB | N/A | ||
| EV/EBITDA | 27.61 |
EPS(TTM)14.61
EY2.82%
EPS(NY)16.35
Fwd EY3.16%
FCF(TTM)14.9
FCFY2.88%
OCF(TTM)16.21
OCFY3.13%
SpS30.89
BVpS7.11
TBVpS-8.95
PEG (NY)2.97
PEG (5Y)2.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.78% | ||
| ROE | 198.52% | ||
| ROCE | 57.23% | ||
| ROIC | 47.64% | ||
| ROICexc | 68.44% | ||
| ROICexgc | 252.59% | ||
| OM | 58.64% | ||
| PM (TTM) | 45.71% | ||
| GM | N/A | ||
| FCFM | 48.23% |
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-Score6
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 1.34 | ||
| Debt/EBITDA | 1 | ||
| Cap/Depr | 133.11% | ||
| Cap/Sales | 4.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.87% | ||
| Profit Quality | 105.53% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 10.66 |
F-Score6
WACC8.81%
ROIC/WACC5.41
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)19.17%
EPS 3Y20.21%
EPS 5Y13.43%
EPS Q2Q%20.13%
EPS Next Y11.91%
EPS Next 2Y14.76%
EPS Next 3Y15.39%
EPS Next 5Y15.3%
Revenue 1Y (TTM)12.23%
Revenue growth 3Y14.26%
Revenue growth 5Y10.78%
Sales Q2Q%14.37%
Revenue Next Year12.37%
Revenue Next 2Y12.43%
Revenue Next 3Y12.41%
Revenue Next 5YN/A
EBIT growth 1Y12.9%
EBIT growth 3Y16.72%
EBIT growth 5Y10.81%
EBIT Next Year18.72%
EBIT Next 3Y15.16%
EBIT Next 5Y13.73%
FCF growth 1Y24.73%
FCF growth 3Y16.25%
FCF growth 5Y12.75%
OCF growth 1Y23.37%
OCF growth 3Y16.02%
OCF growth 5Y12.55%