V - Mastercard: Expensive But Wonderful

2024-05-20 12:02:12 ET

Summary

• MasterCard's revenue growth has been steady, with a 10-year CAGR of 11.7% and increasing operating margins.
• The company has a strong balance sheet and low debt ratio, with a low cost of capital.
• The market is currently pricing in high-growth assumptions for MasterCard, but historical total returns have been lower than the broader market.
• The current market price is at the very top end of my estimate of MasterCard's intrinsic value.

Author's Preamble

I have an actively managed investment portfolio and I regularly trade stocks within my investing universe (or watch list) depending upon the stock’s price relative to my intrinsic valuation and its market trading patterns.

I share my valuations with readers as a way to get feedback and to gain new insights from other knowledgeable investors....

For further details see: