The Zacks Analyst Blog Highlights Visa, Mastercard, American Express and Discover Financial Services

For Immediate ReleaseChicago, IL – March 12, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Visa Inc. V, Mastercard Inc. MA, American Express Co. AXP and Discover Financial Services DFS.Here are highlights from Tuesday’s Analyst Blog:Visa vs. Mastercard: Which Payments Giant Makes the Better Stock to Buy Now?The Battle of Payment TitansVisa Inc. and Mastercard Inc. dominate the payments industry, benefiting from the ongoing global shift toward digital transactions. While they share similar strengths, each has distinct advantages and challenges. With market caps of $641.5 billion (Visa) and $498.5 billion (Mastercard), they form a powerful duopoly, which is often scrutinized by regulators.Competitors like American Express Co. and Discover Financial Services continue expanding their networks but remain far behind these two industry leaders. So, which stock offers the better investment opportunity today? Let's start by examining the risks.Regulatory Challenges: A Growing ConcernBoth Visa and Mastercard are under increased regulatory scrutiny, particularly in the United States and the U.K. The Credit Card Competition Act of 2023 aims to curb their dominance by increasing competition and reducing merchant costs. However, given the current administration's business-friendly stance, any immediate impact seems unlikely.In the U.K., the Payment Systems Regulator is considering fee caps and transparency measures after merchant fees soared, costing businesses an extra £170 million annually. Additionally, Mastercard was linked to nine unlicensed sites recently and Visa to two, leading to substantial consumer losses. While these challenges could somewhat pressure profitability, both companies maintain strong operational footholds.Strong Operations Drive GrowthVisa's emphasis on technological innovation is evident in products like Visa Token Service, Visa Checkout and Visa In-App Provisioning. The company is also capitalizing on emerging payment trends, including Buy Now, Pay Later (BNPL), crypto, and fintech partnerships. Contactless payments (Tap to Pay) now account for more than 80% of global in-person transactions. However, it anticipates adjusted operating expenses to witness high single-digit to low double-digit growth in fiscal 2025.Mastercard, on the other hand, has strengthened its business through cybersecurity, data analytics and value-added services. Revenues from these segments grew 17.7% in 2023 and 16.8% in 2024. Mastercard's digital expansion in Southeast Asia and Latin America fuels long-term growth but also introduces additional geopolitical risks. Notably, the company expects adjusted operating expenses to see low-teens growth in 2025.Visa vs. Mastercard: Key ComparisonsDividend YieldVisa offers a stronger dividend yield (0.69%) compared to Mastercard (0.57%) and industry (0.67%), making it more attractive to income-focused investors. This higher yield reflects Visa's commitment to returning value to its shareholders.Debt ManagementVisa operates with lower financial leverage than Mastercard, indicating a more conservative debt management approach. Its total debt-to-capital of 34.99% is lower than MA's 73.67% and the industry's 43.13%. This lower leverage can provide greater financial stability and flexibility, especially in uncertain economic conditions.Analyst Sentiment & Earnings OutlookAnalysts currently favor Visa over Mastercard, largely due to its stronger U.S. market exposure while Mastercard's greater international exposure could pose more risk due to geopolitical uncertainties.The Zacks Consensus Estimate for Visa's fiscal 2025 EPS implies a 12.4% year-over-year uptick, which witnessed 12 upward estimate revisions in the past 60 days against one opposite movement. On the other hand, the consensus mark for Mastercard's 2025 EPS signals 9% year-over-year growth, which has witnessed no upward movement but 14 downward estimate revisions.See the Zacks Earnings Calendar to stay ahead of market-making news.Visa's stronger earnings growth and positive analyst sentiment make it the more compelling choice. Moreover, buying V stock is a more cost-effective option now compared to MA.Price Performance & ValuationOver the past year, shares of Visa have outperformed Mastercard, the industry and the S&P 500 Index.1-Year Price Performance – V, MA, AXP, DFS, Industry & S&P 500Yet, in terms of valuation, Visa is relatively cheaper than Mastercard. Going by its price/earnings ratio, Visa is trading at a forward earnings multiple of 28.63X, lower than Mastercard's 32.71X.The Verdict: Visa or Mastercard?While both Visa and Mastercard are strong contenders in the payments industry, current analyses suggest that Visa may offer a more favorable investment opportunity at this time. Its strong U.S. market exposure, attractive valuation and positive analyst outlook position it well for potential investors. Investors should still consider their risk tolerance, as regulatory pressures could impact both firms.Visa stock, rightfully, has a Zacks Rank #2 (Buy) now, whereas Mastercard stock has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                   Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report Discover Financial Services (DFS): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks