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First of all, it is a world-renowned brand. Second, citizens regularly use bank cards to purchase goods and services or to withdraw cash from an ATM. Third, it's a four-letter logo. This is, of course, the American company Visa.
Investing in Visa stocks means speculating on the world leader in payment methods and, more specifically, in the field of bank cards. It is one of the few financial companies that has quickly overcome the subprime crisis. Since its IPO in 2008 and the beginning of April 2021, its share price has risen by more than 14,000%.
Operating in an industry that is susceptible to technological disruption, Visa is in a favorable position to take advantage of current mega-trends. Although it will not happen too soon, Visa expects the disappearance of the bank card in a society where people make payments via smartphones. On the other hand, retail banks are seeing their business put to the test.
Due to its excellent stock and financial results, Visa is considered a stock that should be included in the investment portfolio. If you are interested in investing in the medium and long term, it is always advisable to analyze its intrinsic fundamentals (activity, history, financial statements, dividends), stock price history and risks / opportunities.
Visa Stock - Company History
Visa was founded after the launch of the BankAmericard credit card by Bank of America in September 1958. It was soon competed by Master Charge (now Mastercard). Several thousand local banks have migrated from local bank cards to BankAmericard and Master Charge.
This favored the emergence of a duopoly in the payments sector, in which Visa and Mastercard held over 80% of the market share at the end of 2010.
During 1970, BankAmericard changed its name to Visa to give the brand greater international exposure. In the same decade, electronic payment was introduced, followed by Visa Classic and Premier cards in 1977 and 1979, respectively.
The 1980s and 1990s marked the international expansion of the Visa brand. The American company benefited from the worldwide network of ATMs installed in the most frequented locations.
In March 2008, Visa went public on the New York Stock Exchange under the name Visa Inc. at a price of $ 43.5 per share. In September 2013, Visa became a member of the Dow Jones Index, along with Goldman Sachs and Nike, to the detriment of Alcoa, Bank of America and the Hewlett-Packard Company.
In a bid to keep up with new online payment technologies, Visa has acquired:
✅ Japanese startup Paidy, specialized in online payment solutions without card, in August 2018;
✅ The California startup Very Good Security, which specializes in managing sensitive digital data since January 2020;
Visa Shares - Visa Business Model
Visa's goal is to provide a reliable, transparent and secure payment service for businesses and consumers. The American company offers a range of Visa brand products, such as pre-pay, debit and credit cards (Visa Classic, Visa Electron, Visa Infinite, Visa Platinum, V Pay, etc.).
In a world focused on digital and mobile technology, Visa is accelerating the transformation of its business model into digital payments by creating offers such as Visa Checkout for online commerce, Visa Token Service for financial institutions, physical stores and partners, and Visa contactless to facilitate payments. contactless and via smartphones.
As consumers become more open to using smartphones as a means of payment, Visa is collaborating with leading technology names such as Apple with Apple Pay, Alphabet with Google Play, and Samsung with Samsung Pay.
As consumers become more open to using smartphones as a means of payment, Visa is collaborating with big names in technology, such as Apple with Apple Pay, Alphabet with Google Play, and Samsung with Samsung Pay.
Visa's corporate business is divided into four distinct activities:
✴️ Revenues from services that refer to revenues from the use of different Visa payment cards;
✴️ Revenues from data processing that refer to revenues obtained in the payment process (authorization, processing, clearing, settlement);
✴️ Revenues from international transactions relate to the processing and settlement of cross-border payments and currency conversions;
✴️ Other services include license fees for the use of the Visa brand, counseling services, etc .;
With an extensive presence in 200 countries, Visa generates 53.7% of its revenues internationally. The United States is its largest market.
Visa Stock - Visa Competitors
The payment industry is changing with the democratization of digital technology. Technological innovation disrupts consumer habits and generates growth opportunities, such as online commerce, blockchain technology, mobile payments and virtual currencies.
This changes the rules of the game in favor of new operators that offer high value-added services at low cost and reshape the regulatory environment.
Visa competes with all means of payment. These include cash services, checks and various forms of electronic payment.
Internationally, the competitors include Mastercard, American Express, Union Pay, Western Union, JCB and Discovery. At the regional and local level, there are STAR, NYCE and Pulse in the USA, Interac in Canada, EFTOS in Australia and Mir in Russia.
Visa Shares - Visa Shareholders
Visa's majority shareholders are institutional investors. Most of them are asset management companies. Vanguard Group ranks first with 8.05% of the capital. Blackrock, T. Rowe Price Associated and State Street's SSga Funds follow with 4.78%, 4.6% and 4.34% of the capital respectively.
Fidelity Management & Research, Geode Capital Management and Massachusetts Financial Services are also present.
Visa is also owned by legendary stock investor Warren Buffett through Berkshire Hathaway for about 10 million shares.
Visa Shares - Dividend and Yield
If you have been investing in Visa shares since the 2008 IPO, then your shareholding has multiplied exponentially due to compound interest. In addition, dividends on Visa shares have risen each year. They rose from $ 0.053 in 2008 to $ 1.22 in 2020, a cumulative increase of more than 2,200%.
Given that Visa's growth rate is significant for the coming years, its yield is unattractive, at about 0.7% compared to 1.6% for the S&P 500 in 2020. This is well below the US market average. .
That being said, for investors it is primarily the intrinsic fundamentals of the company that matter: the quality of the business, the increase in revenue and profits, the margins, the profitability, the increase in cash flow.
Source, Seeking Alpha:
2015: $ 0.5;
2016: $ 0.59;
2017: $ 0.69;
2018: $ 0.88;
2019: $ 1.05;
2020: $ 1.22.
Visa has successfully overcome the Covid-19 crisis, having the opportunity to increase its dividend level. This demonstrates the resilience of his business in a difficult economic time. On the other hand, you don't have to worry about the value of your dividends. On the one hand, the rate of return (dividend / profit per share) is relatively low, around 25-26%.
On the other hand, his indebtedness is encouraging. Visa would have no problem obtaining new funding to support its business. Moody's and Standard & Poor's have given it high-quality financial ratings, AA3 and AA-, respectively.
Visa Stock - Risks and Opportunities
Visa enjoys significant lasting competitive advantages and enjoys a duopoly with Mastercard in the field of international payment services. According to the Nilson Report, Visa holds about 62% of the market share in terms of total credit and debit card purchases in the United States. Its size and presence in 200 countries gives it a significant advantage in terms of network effect over its competitors.
The Visa brand is internationally known. He has established his position as a leader on all five continents. In fact, Visa is among the top 100 global brands in the annual Interbrand Best Global 2020 report.
The emergence of online payments and the reluctance of merchants to pay the high fees charged by Visa is not an obstacle to expanding its business model. On the one hand, Visa has a strong position in terms of online payment platforms such as Paypal, Stripe, Hipay or Square.
On the other hand, in the event that the related merchants do not authorize Visa, they risk losing their regular customers to pay with that card.
In terms of risks, there are three. The first risk is the competitive one. With a high market share, Visa faces legal and regulatory challenges.
The second risk is the emergence of online payments through mobile applications and wallets, which could lead to a decrease in the use of bank cards and customer purchase costs.
The third risk is the dissatisfaction of its customers, who will pay high commissions for each purchase. In the near or distant future, alliances between merchants and banking networks could emerge to provide a competitive service, which could later encourage the US company to reduce its fees.
However, Visa's business model is difficult for new entrants to understand. The US company anticipated changes in its sector and turned them into new growth factors. As you can see on a daily basis, it is difficult not to use Visa for essential shopping and more.
And even if the bank card disappears, Visa has the power to take advantage of the megatrends of the new global economy.
The excellent fundamentals indicate a positive outlook for Visa shares. Followed by a large number of financial analysts, it can be an interesting option for long-term investors looking for a balance between dividends and capital growth.
Investing in Visa stocks means speculating on the world leader in payment methods and, more specifically, in the field of bank cards. It is one of the few financial companies that has quickly overcome the subprime crisis. Since its IPO in 2008 and the beginning of April 2021, its share price has risen by more than 14,000%.
Operating in an industry that is susceptible to technological disruption, Visa is in a favorable position to take advantage of current mega-trends. Although it will not happen too soon, Visa expects the disappearance of the bank card in a society where people make payments via smartphones. On the other hand, retail banks are seeing their business put to the test.
Due to its excellent stock and financial results, Visa is considered a stock that should be included in the investment portfolio. If you are interested in investing in the medium and long term, it is always advisable to analyze its intrinsic fundamentals (activity, history, financial statements, dividends), stock price history and risks / opportunities.
Visa Stock - Company History
Visa was founded after the launch of the BankAmericard credit card by Bank of America in September 1958. It was soon competed by Master Charge (now Mastercard). Several thousand local banks have migrated from local bank cards to BankAmericard and Master Charge.
This favored the emergence of a duopoly in the payments sector, in which Visa and Mastercard held over 80% of the market share at the end of 2010.
During 1970, BankAmericard changed its name to Visa to give the brand greater international exposure. In the same decade, electronic payment was introduced, followed by Visa Classic and Premier cards in 1977 and 1979, respectively.
The 1980s and 1990s marked the international expansion of the Visa brand. The American company benefited from the worldwide network of ATMs installed in the most frequented locations.
In March 2008, Visa went public on the New York Stock Exchange under the name Visa Inc. at a price of $ 43.5 per share. In September 2013, Visa became a member of the Dow Jones Index, along with Goldman Sachs and Nike, to the detriment of Alcoa, Bank of America and the Hewlett-Packard Company.
In a bid to keep up with new online payment technologies, Visa has acquired:
✅ Japanese startup Paidy, specialized in online payment solutions without card, in August 2018;
✅ The California startup Very Good Security, which specializes in managing sensitive digital data since January 2020;
Visa Shares - Visa Business Model
Visa's goal is to provide a reliable, transparent and secure payment service for businesses and consumers. The American company offers a range of Visa brand products, such as pre-pay, debit and credit cards (Visa Classic, Visa Electron, Visa Infinite, Visa Platinum, V Pay, etc.).
In a world focused on digital and mobile technology, Visa is accelerating the transformation of its business model into digital payments by creating offers such as Visa Checkout for online commerce, Visa Token Service for financial institutions, physical stores and partners, and Visa contactless to facilitate payments. contactless and via smartphones.
As consumers become more open to using smartphones as a means of payment, Visa is collaborating with leading technology names such as Apple with Apple Pay, Alphabet with Google Play, and Samsung with Samsung Pay.
As consumers become more open to using smartphones as a means of payment, Visa is collaborating with big names in technology, such as Apple with Apple Pay, Alphabet with Google Play, and Samsung with Samsung Pay.
Visa's corporate business is divided into four distinct activities:
✴️ Revenues from services that refer to revenues from the use of different Visa payment cards;
✴️ Revenues from data processing that refer to revenues obtained in the payment process (authorization, processing, clearing, settlement);
✴️ Revenues from international transactions relate to the processing and settlement of cross-border payments and currency conversions;
✴️ Other services include license fees for the use of the Visa brand, counseling services, etc .;
With an extensive presence in 200 countries, Visa generates 53.7% of its revenues internationally. The United States is its largest market.
Visa Stock - Visa Competitors
The payment industry is changing with the democratization of digital technology. Technological innovation disrupts consumer habits and generates growth opportunities, such as online commerce, blockchain technology, mobile payments and virtual currencies.
This changes the rules of the game in favor of new operators that offer high value-added services at low cost and reshape the regulatory environment.
Visa competes with all means of payment. These include cash services, checks and various forms of electronic payment.
Internationally, the competitors include Mastercard, American Express, Union Pay, Western Union, JCB and Discovery. At the regional and local level, there are STAR, NYCE and Pulse in the USA, Interac in Canada, EFTOS in Australia and Mir in Russia.
Visa Shares - Visa Shareholders
Visa's majority shareholders are institutional investors. Most of them are asset management companies. Vanguard Group ranks first with 8.05% of the capital. Blackrock, T. Rowe Price Associated and State Street's SSga Funds follow with 4.78%, 4.6% and 4.34% of the capital respectively.
Fidelity Management & Research, Geode Capital Management and Massachusetts Financial Services are also present.
Visa is also owned by legendary stock investor Warren Buffett through Berkshire Hathaway for about 10 million shares.
Visa Shares - Dividend and Yield
If you have been investing in Visa shares since the 2008 IPO, then your shareholding has multiplied exponentially due to compound interest. In addition, dividends on Visa shares have risen each year. They rose from $ 0.053 in 2008 to $ 1.22 in 2020, a cumulative increase of more than 2,200%.
Given that Visa's growth rate is significant for the coming years, its yield is unattractive, at about 0.7% compared to 1.6% for the S&P 500 in 2020. This is well below the US market average. .
That being said, for investors it is primarily the intrinsic fundamentals of the company that matter: the quality of the business, the increase in revenue and profits, the margins, the profitability, the increase in cash flow.
Source, Seeking Alpha:
2015: $ 0.5;
2016: $ 0.59;
2017: $ 0.69;
2018: $ 0.88;
2019: $ 1.05;
2020: $ 1.22.
Visa has successfully overcome the Covid-19 crisis, having the opportunity to increase its dividend level. This demonstrates the resilience of his business in a difficult economic time. On the other hand, you don't have to worry about the value of your dividends. On the one hand, the rate of return (dividend / profit per share) is relatively low, around 25-26%.
On the other hand, his indebtedness is encouraging. Visa would have no problem obtaining new funding to support its business. Moody's and Standard & Poor's have given it high-quality financial ratings, AA3 and AA-, respectively.
Visa Stock - Risks and Opportunities
Visa enjoys significant lasting competitive advantages and enjoys a duopoly with Mastercard in the field of international payment services. According to the Nilson Report, Visa holds about 62% of the market share in terms of total credit and debit card purchases in the United States. Its size and presence in 200 countries gives it a significant advantage in terms of network effect over its competitors.
The Visa brand is internationally known. He has established his position as a leader on all five continents. In fact, Visa is among the top 100 global brands in the annual Interbrand Best Global 2020 report.
The emergence of online payments and the reluctance of merchants to pay the high fees charged by Visa is not an obstacle to expanding its business model. On the one hand, Visa has a strong position in terms of online payment platforms such as Paypal, Stripe, Hipay or Square.
On the other hand, in the event that the related merchants do not authorize Visa, they risk losing their regular customers to pay with that card.
In terms of risks, there are three. The first risk is the competitive one. With a high market share, Visa faces legal and regulatory challenges.
The second risk is the emergence of online payments through mobile applications and wallets, which could lead to a decrease in the use of bank cards and customer purchase costs.
The third risk is the dissatisfaction of its customers, who will pay high commissions for each purchase. In the near or distant future, alliances between merchants and banking networks could emerge to provide a competitive service, which could later encourage the US company to reduce its fees.
However, Visa's business model is difficult for new entrants to understand. The US company anticipated changes in its sector and turned them into new growth factors. As you can see on a daily basis, it is difficult not to use Visa for essential shopping and more.
And even if the bank card disappears, Visa has the power to take advantage of the megatrends of the new global economy.
The excellent fundamentals indicate a positive outlook for Visa shares. Followed by a large number of financial analysts, it can be an interesting option for long-term investors looking for a balance between dividends and capital growth.
