Are Stock Repurchases Driving MasterCard?
The graph below was produced by Capital Market Labs.
Of all North American companies with market capitalizations above $50 billion (approximately 100 companies), Mastercard Inc (NYSE: MA) has the second largest amount of stock repurchases relative to total assets, larger than even Apple (which comes in at number three).
In the chart below, one can see that Mastercard stock price has risen approximately 240 percent just as stock repurchases (over total assets) has grown by 280 percent in the period from April 2011 to the present.
The zero interest-rate environment has pushed stock repurchases to near record highs for the entire S&P 500.
The question becomes: Is a part of this bull market run simply artificial demand for stocks?
Ophir Gottlieb can be found on Twitter @ophirgottlieb.
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