MASTERCARD INC - A (MA) Stock Fundamental Analysis
NYSE:MA - New York Stock Exchange, Inc. - US57636Q1040 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to MA. MA was compared to 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. With these ratings, MA could be worth investigating further 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.
In the past 5 years MA has always been profitable.
In the past 5 years MA always reported a positive cash flow from operatings.
1.2 Ratios
MA's Return On Assets of 26.78% is amongst the best of the industry. MA outperforms 100.00% of its industry peers.
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.
Looking at the Return On Invested Capital, with a value of 47.59%, MA belongs to the top 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 7.75%.
The 3 year average ROIC (45.59%) for MA is below the current ROIC(47.59%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.78% | ||
| ROE | 198.52% | ||
| ROIC | 47.59% |
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
Looking at the Profit Margin, with a value of 45.71%, MA belongs to the top of the industry, outperforming 91.09% of the companies in the same industry.
MA's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 58.58%, 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 | 58.58% | ||
| 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
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
MA has an Altman-Z score of 11.28. This indicates that MA is financially healthy and has little risk of bankruptcy at the moment.
MA's Altman-Z score of 11.28 is amongst the best of the industry. MA outperforms 95.05% of its industry peers.
MA has a debt to FCF ratio of 1.34. This is a very positive value and a sign of high solvency as it would only need 1.34 years to pay back of all of its debts.
The Debt to FCF ratio of MA (1.34) is better than 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.
Looking at the Debt to Equity ratio, with a value of 2.69, MA is doing worse than 71.29% of the companies in the same industry.
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 | 11.28 |
ROIC/WACC3.04
WACC15.64%
2.3 Liquidity
A Current Ratio of 1.03 indicates that MA should not have too much problems paying its short term obligations.
MA's Current ratio of 1.03 is in line compared to the rest of the industry. MA outperforms 49.51% of its industry peers.
A Quick Ratio of 1.03 indicates that MA should not have too much problems paying its short term obligations.
MA has a Quick ratio (1.03) 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 | 1.03 | ||
| 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.
The Revenue has grown by 12.23% in the past year. This is quite good.
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)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
The Earnings Per Share is expected to grow by 15.85% on average over the next years. This is quite good.
The Revenue is expected to grow by 12.28% on average over the next years. This is quite good.
EPS Next Y11.9%
EPS Next 2Y14.77%
EPS Next 3Y15.34%
EPS Next 5Y15.85%
Revenue Next Year12.35%
Revenue Next 2Y12.41%
Revenue Next 3Y12.28%
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
Based on the Price/Earnings ratio of 38.16, 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 68.32% of the companies in the same industry.
MA's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 29.63.
With a Price/Forward Earnings ratio of 34.10, MA can be considered very expensive at the moment.
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.
The average S&P500 Price/Forward Earnings ratio is at 22.68. MA is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.16 | ||
| Fwd PE | 34.1 |
4.2 Price Multiples
MA's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MA is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.51 | ||
| EV/EBITDA | 30.12 |
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.
MA's earnings are expected to grow with 15.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.21
PEG (5Y)2.84
EPS Next 2Y14.77%
EPS Next 3Y15.34%
5. Dividend
5.1 Amount
MA has a yearly dividend return of 0.54%, which is pretty low.
MA's Dividend Yield is comparable with the industry average which is at 3.84.
Compared to an average S&P500 Dividend Yield of 2.29, MA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
5.2 History
On average, the dividend of MA grows each year by 14.95%, which is quite nice.
MA has been paying a dividend for at least 10 years, so it has a reliable track record.
MA has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.95%
Div Incr Years12
Div Non Decr Years17
5.3 Sustainability
MA pays out 19.02% of its income as dividend. This is a 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.
DP19.02%
EPS Next 2Y14.77%
EPS Next 3Y15.34%
557.51
-5.77 (-1.02%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners79.61%
Inst Owner Change11.17%
Ins Owners0.05%
Ins Owner Change-0.42%
Market Cap509.56B
Analysts81.25
Price Target580.41 (4.11%)
Short Float %0.61%
Short Ratio1.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
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)0.91%
PT rev (3m)7.67%
EPS NQ rev (1m)-2.86%
EPS NQ rev (3m)-5.61%
EPS NY rev (1m)-2.65%
EPS NY rev (3m)-2.96%
Revenue NQ rev (1m)-0.72%
Revenue NQ rev (3m)-0.48%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.16 | ||
| Fwd PE | 34.1 | ||
| P/S | 18.09 | ||
| P/FCF | 37.51 | ||
| P/OCF | 34.48 | ||
| P/B | 78.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 30.12 |
EPS(TTM)14.61
EY2.62%
EPS(NY)16.35
Fwd EY2.93%
FCF(TTM)14.86
FCFY2.67%
OCF(TTM)16.17
OCFY2.9%
SpS30.82
BVpS7.1
TBVpS-8.93
PEG (NY)3.21
PEG (5Y)2.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.78% | ||
| ROE | 198.52% | ||
| ROCE | 57.17% | ||
| ROIC | 47.59% | ||
| ROICexc | 68.37% | ||
| ROICexgc | 252.35% | ||
| OM | 58.58% | ||
| 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 | 84.95% | ||
| Profit Quality | 105.53% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 11.28 |
F-Score6
WACC15.64%
ROIC/WACC3.04
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 Y11.9%
EPS Next 2Y14.77%
EPS Next 3Y15.34%
EPS Next 5Y15.85%
Revenue 1Y (TTM)12.23%
Revenue growth 3Y14.26%
Revenue growth 5Y10.78%
Sales Q2Q%14.37%
Revenue Next Year12.35%
Revenue Next 2Y12.41%
Revenue Next 3Y12.28%
Revenue Next 5YN/A
EBIT growth 1Y12.79%
EBIT growth 3Y16.72%
EBIT growth 5Y10.81%
EBIT Next Year18.79%
EBIT Next 3Y15.04%
EBIT Next 5Y13.87%
FCF growth 1Y24.73%
FCF growth 3Y16.25%
FCF growth 5Y12.75%
OCF growth 1Y23.37%
OCF growth 3Y16.02%
OCF growth 5Y12.55%