Electronic payments processor Visa Inc. (V – Free Visa Stock Report) concluded fiscal 2019 with solid operating results. (Fiscal years end on September 30th.) During the fiscal fourth quarter, the Dow-30 component registered $6.137 billion in revenues and $1.47 in adjusted share earnings, representing respective advances of 13% and 20% from the comparable year-earlier totals. (Our respective top- and bottom-line forecasts were for $6.160 billion and $1.42 per share.) For the full year, Visa logged $22.98 billion in revenues and $5.44 in adjusted earnings per share, marking year-over-year growth of 11% and 23%, respectively. Visa stock is relatively unchanged in pre-market action following the financial release.
Transaction growth, both domestically and abroad, remained brisk in the September term. On point, total dollar volumes in Europe, Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa increased 8.8%, 18.4%, 5.4%, and 24.5%, respectively, from the prior-year figures. Too, dollar volumes in Visa's home market of North America were not too shabby, rising 8.2% and 7.6%, respectively, in the United States and Canada during the latest three-month stretch. Moreover, cross-border volumes expanded 7%, and the company processed 36.4 billion transactions in the fiscal fourth quarter and a whopping 138.3 billion transactions for all of 2019, with both tallies representing gains of 11%, year over year. (All figures are presented on a constant-dollar basis.)
Looking ahead to fiscal 2020, we anticipate another year of record-setting results for Visa, driven by its vast, geographically diverse operations. In light of the company's better-than-expected September-term bottom-line performance, we've added $0.10 to our fiscal 2020 adjusted earnings-per-share target, bringing it to $6.50, while maintaining our top-line call at $25.50 billion. (Those respective estimates would mark year-to-year growth of 18%-20% and 10%-12%.)
In a nutshell, Visa shares would make a fine addition to most investment portfolios, in our view. The board continues to return capital to shareholders. The quarterly dividend was recently raised 20%, to $0.30 per share, and the company repurchased $8.6 billion worth of Visa stock during fiscal 2019. It also has another $4.0 billion of funds available for buybacks.
Visa remains the worldwide leader in the electronic payments space, logging more swipes than its three closest competitors (American Express, Discover Financial Services, and MasterCard) combined. Its expansion efforts are backed by a strong balance sheet, with the debt-to-total capital ratio at a respectable 33% during the fiscal fourth quarter. Finally, the equity is top ranked for Safety (1, Highest), and the company earns a stellar mark for Financial Strength (A++).
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
