Visa Inc.

Exchange

NYSE

Sector

Miscellaneous

Industry

Business Services

Market Cap.

253.40B

Vuru Grade

56.73/100

Current Price

$110.83
+0.8461 (+0.7693%)

Growth Price

$58.15
Overvalued by 47.53%

Stability Price

$20.49
Overvalued by 81.51%

Company Metrics

  • P/E 41.2146
  • P/S 14.1557
  • P/B 9.5246
  • EPS 2.689
  • Cash ROIC 12.01%
  • Cash Ratio -
  • Dividend 0.78 / 0.71%
  • Avg. Vol. 6.71M
  • Shares 2.29B
  • Market Cap. 253.40B

Company Description

Visa Inc. operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services linking issuers and acquirers. It also offers a range of payme... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Visa As A Dividend Income Stock
Seeking Alpha - 14 hours ago
As an investor who is looking for dividend income, I like to look into possible future holdings for my portfolio. Visa is a dividend growth stock, but the yield is low.
Visa Slowing To Single-Digit Growth Rates
Seeking Alpha - Nov 20, 2017
Post Visa Europe integration, quarterly year-over-year growth was 19%, 25%, 23%, 26% and now coming down to 14%. Visa's management is now forecasting revenue growth in the high single digits with EPS growth in the mid-teens, artificially high due to ...
Visa Inc. (V) Closes 1.36% Up on the Day for November 21
Equities.com - 12 hours ago
Shares of Visa Inc. (V) ended the trading day Tuesday at $111.45, representing a move of 1.36%, or $1.5 per share, on volume of 6.45 million shares.
Visa Inc. Wages War on Cash
Motley Fool - Oct 26, 2017
Data processing revenue rose 16% to $2.1 billion, as the number of transactions processed on Visa's network increased 13% to 29.2 billion.
Visa Could Be Perpetually 'Overvalued' For A Reason
Seeking Alpha - Nov 20, 2017
The "winner-takes-all" nature of the business of payments processing gives the firm a wide moat, and unless some unforeseen disruption shifts the way we use cards or utilize Visa's payment processing infrastructure, I don't see why the company can't ...
Visa's profit beats on higher card swipes, stock at record
Reuters - Oct 25, 2017
Visa has been tapping into the U.S. market aggressively, offering incentives to use to cards instead of cash on everyday purchases.
Visa Reports Strong Earnings - Seeking Alpha
Visa's 18% dividend increase
Motley Fool - Oct 24, 2017
Making a strong case for both Visa's commitment to dividend increases and its ability to consistently increase its dividend by strong rates, Visa also increased its dividend by 18% last year. In fact, Visa's dividend nearly doubled over the past four ...
Visa: Everywhere We Want To Be
Seeking Alpha - Nov 6, 2017
Visa was out with earnings recently and the Street is pushing the stock to new all-time highs. We offer discourse and analysis on trends in key business metrics by which to gauge the health of this company and the stock.
Mosaic Family Wealth LLC Sells 3500 Shares of Visa Inc. (V)
The Ledger Gazette - 6 hours ago
Visa logo Mosaic Family Wealth LLC lessened its holdings in Visa Inc. (NYSE:V) by 33.2% during the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission.
Federated Investors Inc. PA Grows Position in Visa Inc. (V) - StockNewsTimes
RiverPoint Capital Management LLC Grows Position in Visa Inc. (NYSE:V) - TrueBlueTribune
How Mastercard Inc Stacks Up Against Visa Inc Post Earnings
Investorplace.com - Nov 10, 2017
In the world of investing, perhaps no two companies appear to be as fundamentally similar as American credit card giants Mastercard Inc (NYSE:MA) and Visa Inc (NYSE: V). Both companies have very similar five-year stock price appreciation growth rates ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for V to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate V's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$110.83 Current Price

$58.15 Growth Price (DCF)

Overvalued by 47.53%


Growth Rate Assumed by Market: 33.73%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$20.49 Stability Price (EPV)

Overvalued by 81.51%


Discount Rate: 15.0%

$58.50 Book Price

Overvalued by 47.22%


Satisfactory Cash Return on Invested Capital over the past 5 years

V has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely V could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

V has created $12.01 of cash for every $100 invested.
Figures in USD. Fiscal year ends in September
20132014201520162017
Free Cash Flow 2.55B 6.65B 6.17B 5.05B 8.50B
divided by
Invested Capital 35.96B 38.57B 40.24B 64.04B 67.98B
Cash ROIC 7.09% 17.25% 15.33% 7.89% 12.51%

Excellent Return on Equity over the past 5 years

Over the past 5 years, V has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

V has generated $19.65 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in September
20132014201520162017
Net Income 4.98B 5.44B 6.33B 5.99B 6.70B
divided by
Stockholders' Equity 26.87B 27.41B 29.84B 32.91B 32.76B
Return on Equity 18.53% 19.84% 21.21% 18.20% 20.45%

Excellent Business Performance over the past 10 years

V has been able to maintain profitability in good times and bad. This could mean V has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

V has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Free Cash Flow 116.00M 252.00M 2.45B 3.52B 4.63B 2.55B 6.65B 6.17B 5.05B 8.50B

Weak Balance Sheet

V's financial position is not ideal. The key is to check whether V is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 34.98B 32.28B 33.41B 34.76B 40.01B 35.96B 38.57B 40.24B 64.04B 67.98B
Current Liabilities - - - - - - - - - -
Total Liabilities 13.84B 9.09B 8.40B 8.32B 12.38B 9.09B 11.16B 10.39B 31.12B 35.22B
Stockholder' Equity 21.14B 23.19B 25.01B 26.44B 27.63B 26.87B 27.41B 29.84B 32.91B 32.76B
Current Ratio - - - - - - - - - -
TL-to-TA 0.40 0.28 0.25 0.24 0.31 0.25 0.29 0.26 0.49 0.52

Consistent Reinvestment of Profits over the past 10 years

V has consistently retained profits. This may put V in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, V can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Retained Earnings 186.00M 2.22B 4.37B 6.71B 7.81B 7.97B 9.13B 11.84B 10.46B 9.51B
Retained Earnings Growth - 1,093.01% 96.85% 53.53% 16.45% 2.11% 14.51% 29.70% -11.66% -9.12%

Varying Competitive Advantage over the past 10 years

V likely has a competitive advantage which prevents other companies from entering or competing in their industry. However, there is a substantial variation in their Net Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$35.09 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Net Income 804.00M 2.35B 2.97B 3.65B 2.14B 4.98B 5.44B 6.33B 5.99B 6.70B
divided by
Revenue 6.26B 6.91B 8.07B 9.19B 10.42B 11.78B 12.70B 13.88B 15.08B 18.36B
Net Profit Margin 12.84% 34.05% 36.78% 39.73% 20.57% 42.28% 42.81% 45.59% 39.72% 36.49%

Weak Pricing Power over the past 10 years

V is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that V has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Gross Profit - - - - - - - - - -
divided by
Revenue 6.26B 6.91B 8.07B 9.19B 10.42B 11.78B 12.70B 13.88B 15.08B 18.36B
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

V has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that V may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

14.54% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Capital Expenditure 415.00M 306.00M 241.00M 353.00M 376.00M 471.00M 553.00M 414.00M 523.00M 707.00M
divided by
Net Income 804.00M 2.35B 2.97B 3.65B 2.14B 4.98B 5.44B 6.33B 5.99B 6.70B
Capital Expenditure Ratio 51.62% 13.00% 8.13% 9.67% 17.54% 9.46% 10.17% 6.54% 8.73% 10.55%

Very Strong Dividend History over the past 10 years

V has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests V is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Dividend Paid 93.00M 318.00M 368.00M 423.00M 595.00M 864.00M 1.01B 1.18B 1.35B 1.58B
divided by
Shares Outstanding 1.39B 1.05B 739.00M 1.02B 678.00M 656.00M 631.00M 2.46B 2.41B 2.40B
Dividend Paid Per Share 0.07 0.30 0.50 0.41 0.88 1.32 1.59 0.48 0.56 0.66
Price at Year End 49.82 86.70 69.60 101.34 148.65 220.91 264.55 78.35 78.02 92.73
Dividend Yield 0.13% 0.35% 0.72% 0.41% 0.59% 0.60% 0.60% 0.61% 0.72% 0.71%

Strong History of Stock Buybacks over the past 10 years

V has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in September
2008200920102011201220132014201520162017
Shares Outstanding 1.39B 1.05B 739.00M 1.02B 678.00M 656.00M 631.00M 2.46B 2.41B 2.40B
Stock Bought Back - 32.79% 41.95% -27.69% 50.74% 3.35% 3.96% -74.32% 1.78% 0.79%
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