MasterCard Raises Quarterly Dividend by 83%, But Some Analysts Say Hold On
MasterCard (NYSE: MA) seems to get better and better. The credit card company announced an 83 percent increase its in quarterly dividend, a 10-for-1 stock split and a $3.5 billion share repurchase program last week.
Despite all the good news, there are some analysts who don't think MasterCard is a buy.
Janney Capital Markets Analyst Tom McCrohan told Barron's that he thinks MasterCard is overpriced. McCrohan expects MasterCard's share price will fall in the near future and he advised investors to wait to buy it.
In Thursday's trading, MasterCard seemed to justify McCrohan's statement. Shares fell slightly by $6.66, or .84 percent, to $783.91. That means MasterCard might not reach the $800 valuation some observers have expected any time soon.
Despite the pessimism, MasterCard is still one of the biggest successes in the market. Barron's noted ts share price increased by 60 percent in 2013. The stock will also deliver a $1.10 a share dividend with the 83 percent increase announced by management.
At least some of MasterCard's share growth is being driven by an aggressive share buyback program.The company has a $2.5 billion stock repurchase in effect, in addition to the $3.5 billion repurchase program announced last week. The $3.5 billion program will start when the $2.5 billion one ends.
Barron's didn't say MasterCard was a buy but it did recommend that shareholders hold onto the stock.
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