Jim Collins is chairman and CEO, Insight Capital Research and Management, Walnut Creek, California, which manages $365 million. ICRM.com
This week’s Stock of the Week is a company that is most likely in your wallet. It dominates its field and still has potential for great growth.
Visa Inc. (V) will benefit greatly as consumer spending and digital payments continue to grow for years.
It is the world’s largest electronic-payment network, with 44 million merchants and 3.2 billion cardholders, representing more than half of global card transactions. In terms of market share, it’s about twice as large as its rival MasterCard. Revenue was $18.1 billion in fiscal 2017 and likely will climb to $20.1 billion in fiscal 2018 and $22.3 billion in fiscal 2019.
Visa is also helping to shape the future of electronic payments. Many companies—from giants such as Apple or Alphabet to smaller companies such as Venmo or Square—decide to partner with Visa to handle payment-processing rather than reinventing the wheel, which helps Visa maintain its dominance.
It is a very solid company that should do well even in an economic slowdown. And although the majority of payments worldwide are still in the form of cash or check, electronic payments have been steadily gaining ground. The dividend of $0.78/share/yr. recently yielded 0.7% and appears secure.
Fiscal year: September. Earnings per share: 2019 est./$4.73…2018 est./$4.07…2017/$3.44.