Electronic payments processor Visa Inc. (V – Free Visa Stock Report) closed out fiscal 2018 with strong results. (Fiscal years end on September 30th.) During the most recent three-month period, the Dow-30 member logged $5.434 billion in revenues and $1.23 in share earnings, marking advances of 12% and 37%, respectively, from the year-earlier totals. (We had anticipated $5.225 billion and $1.21 per share, respectively, on the top and bottom lines.) For the full year just ended, Visa tallied revenues of $20.61 billion and earned $4.42 per share, representing growth of 12% and 27%, respectively, from fiscal 2017. Visa shares moved modestly higher following the financial release.
Transaction growth remained solid in the September term, both at home and abroad. Indeed, total dollar volumes in Europe, Latin America, Asia/Pacific, and the segment comprised of Central Europe, the Middle East, and Africa expanded 7.5%, 8.1%, 7.8%, and 6.3%, respectively, compared with the prior-year period. Total dollar volumes were also healthy in Visa's home market of North America, rising 10.2% and 9.0%, respectively, in the United States and Canada during the fiscal fourth quarter. In addition, cross-border volumes improved 10%, and the company processed a staggering 32.8 billion transactions, a jump of 12% year over year. (All figures are presented on a constant-dollar basis.)
With Visa's geographically diverse operations continuing to fire on all cylinders, we expect another year of record-setting results in fiscal 2019. Accordingly, we've added $200 million and $0.10 per share, respectively, to our current-year revenue and earnings estimates, which now stand at $23.0 billion and $5.30; the former would mark growth of 10%-12% from 2018, while the latter would represent a gain of 19%-21%.
In sum, Visa shares ought to appeal to investors of all stripes. The board continues to return capital to shareholders, and the quarterly dividend was recently raised 19%, to $0.25 per share. Too, the company repurchased $7.2 billion worth of Visa stock during fiscal 2018, with an additional $4.1 billion of funds available for buybacks. Moreover, the long-term outlook for Visa is favorable; it remains the worldwide leader in the electronic payments industry, registering more swipes than its three closest competitors combined; the company's expansion plans are backed by a strong balance sheet, with debt-to-total capital at a respectable 33%; and its well-managed operations post solid returns during good economic times and bad. Finally, the equity is top ranked for Safety (1, Highest), and the company earns high marks 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
