Financial Sector Ideas

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Mastercard - >>> Don't let this payment giant's low yield -- or huge size -- keep you away


Motley Fool

https://www.fool.com/investing/2021/08/22/3-warren-buffett-dividend-stocks-begging-to-be-bou/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Jason Hall (Mastercard): With a dividend yield south of 0.5% at recent prices, investors looking for yield often overlook Mastercard. Ironically, growth investors might also eschew the company, assuming that with a market cap above $351 billion, its growth days are over.

I think investors in either camp are making a mistake to skip Mastercard. Simply put, this stalwart's scale and brand power have it lined up to ride a massive wave of digital-payments growth around the world in the decades ahead.

Mastercard has a massive economic moat in its trusted, well-known payments network that gives it a massive network effect advantage. Having a relationship -- whether as a cardholder, accepting merchant, or a bank that issues Mastercard -- gives you access to the other two. And the more of each that is a Mastercard partner, the more of the others that want access. That's a killer advantage.

This economic moat is why Mastercard's stock has consistently outperformed the S&P 500 on just about every three-, five-, and 10-year period since going public, and is likely to continue outperforming. It's also likely the reason why Mastercard is in the Berkshire Hathaway portfolio.

One last thing: The yield may be low, but the dividend growth is incredible. Here's how much it's increased since being implemented, juicing Mastercard's total returns an extra 570%:

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