Electronic payments processor Visa Inc. (V – Free Visa Stock Report) kicked off fiscal 2020 with solid operating results. (Fiscal years end on September 30th.) During the fiscal first quarter, the Dow-30 member saw revenues advance 10% year over year, to $6.054 billion, while earnings improved 12%, to $1.46 per share. Both figures represented all-time highs for the December period. However, Visa stock traded slightly lower following the earnings release.
Transaction activity, both at home and abroad, continues to expand at a good clip. During the three-month period ended December 31st, total dollar volumes in Europe, Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa increased 8.0%, 17.3%, 4.3%, and 22.0%, respectively. At the same time, volumes in the United States and Canada climbed 7.8% and 4.4%, respectively, during that stretch. We think the measures will expand at a similar pace for all of fiscal 2020. (All figures are presented on a constant-dollar basis.)
All told, fiscal 2020 ought to be another record-setting year for Visa. Our full-year revenue and earnings estimates, at $25.5 billion and $6.20 per share, respectively, would mark annual growth of 10%-11% and 13%-14%. Our projections are based on our expectation of continued growth in total dollar volumes and cross-border transactions, and a generally favorable economic environment.
Meanwhile, the board is returning more capital to shareholders. During the fiscal 2020 first quarter, Visa repurchased 13 million shares of Class-A common stock for an aggregate $2.3 billion. It has $1.7 billion remaining under the current authorization, and the board just approved an additional $9.5 billion in share buybacks. Moreover, the dividend has been raised 26%, on average, annually over the past 10 years.
Top-quality (Safety: 1) Visa stock should appeal to investors of all stripes. The company remains the global leader in the electronic payments space, registering more swipes than its three closest competitors (American Express (AXP – Free AmEx Stock Report), Discover Financial Services (DFS), and MasterCard (MA)) combined. The balance sheet is in very good shape, with debt-to-total capital at a respectable 28% as of December. Visa garners top marks for Financial Strength (A++), and the equity features excellent scores for Price Stability, Price Growth Persistence, and Earnings Predictability.
About The Company: Visa Inc. is the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes credit, debit, prepaid, and commercial payments, which are offered under the Visa, Visa Electron, Interlink, and PLUS brands. Visa/PLUS is one of the largest global ATM networks, offering cash access in local currency in more than 200 countries. Visa’s global network, VisaNet, delivers value-added processing, including fraud and risk management.
– Sharif Abdou
