20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Mastercard (NYSE:MA) alongside its primary competitors in the Financial Services industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Mastercard Background
Mastercard is the second-largest payment processor in the world, having processed close to over $9 trillion in volume during 2023. Mastercard operates in over 200 countries and processes transactions in over 150 currencies.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Mastercard Inc | 39.34 | 62.66 | 17.54 | 42.16% | $3.67 | $5.02 | 12.57% |
| Visa Inc | 31.79 | 14.07 | 17.13 | 12.46% | $6.48 | $6.97 | 8.8% |
| Fiserv Inc | 30.36 | 2.98 | 4.88 | 2.93% | $2.16 | $3.08 | 6.18% |
| PayPal Holdings Inc | 16.82 | 3.23 | 2.40 | 6.87% | $2.14 | $3.67 | 8.71% |
| Block Inc | 3849.50 | 2.54 | 2.16 | 0.98% | $0.15 | $2.03 | 24.13% |
| Fidelity National Information Services Inc | 83.47 | 2.14 | 4.27 | 1.3% | $0.66 | $0.97 | -0.59% |
| Global Payments Inc | 32.82 | 1.37 | 3.35 | 1.59% | $0.99 | $1.51 | 8.03% |
| Corpay Inc | 22.72 | 6.57 | 5.94 | 8.07% | $0.51 | $0.74 | 6.08% |
| Jack Henry & Associates Inc | 32.81 | 7.08 | 5.67 | 5.43% | $0.17 | $0.22 | 7.99% |
| WEX Inc | 38.29 | 5.41 | 4.01 | 4.83% | $0.27 | $0.41 | 7.21% |
| StoneCo Ltd | 26.02 | 1.79 | 2.36 | 2.94% | $0.9 | $2.18 | 25.35% |
| Euronet Worldwide Inc | 18.93 | 3.82 | 1.46 | 5.79% | $0.15 | $0.36 | 10.63% |
| DLocal Ltd | 32.59 | 10.14 | 7.44 | 6.44% | $-0.02 | $0.07 | 58.75% |
| The Western Union Co | 7.85 | 9.37 | 1.13 | 23.25% | $0.22 | $0.4 | -3.63% |
| PagSeguro Digital Ltd | 12.49 | 1.59 | 2.29 | 3.74% | $1.79 | $0.2 | 7.56% |
| Shift4 Payments Inc | 44.74 | 6.11 | 1.52 | 2.6% | $0.09 | $0.2 | 31.19% |
| Paymentus Holdings Inc | 111.78 | 5.80 | 4.10 | 2.22% | $0.02 | $0.05 | 24.68% |
| Evertec Inc | 30.88 | 4.05 | 3.54 | 2.04% | $0.06 | $0.1 | 20.29% |
| Payoneer Global Inc | 20.12 | 2.68 | 2.28 | 4.15% | $0.03 | $0.19 | 22.21% |
| Average | 246.89 | 5.04 | 4.22 | 5.42% | $0.93 | $1.3 | 15.2% |
Through an analysis of Mastercard, we can infer the following trends:
The Price to Earnings ratio of 39.34 is 0.16x lower than the industry average, indicating potential undervaluation for the stock.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 62.66 which exceeds the industry average by 12.43x.
The stock's relatively high Price to Sales ratio of 17.54, surpassing the industry average by 4.16x, may indicate an aspect of overvaluation in terms of sales performance.
With a Return on Equity (ROE) of 42.16% that is 36.74% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.67 Billion, which is 3.95x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $5.02 Billion, which indicates 3.86x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 12.57% is significantly below the industry average of 15.2%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Mastercard in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
As Mastercard is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 2.26 compared to the other companies.
This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.
Key Takeaways
For Mastercard, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and premium valuation. In terms of ROE, EBITDA, and gross profit, Mastercard outperforms peers, reflecting efficient operations and profitability. However, the low revenue growth rate may indicate challenges in expanding market share compared to industry counterparts.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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