Visa Inc.

Exchange

NYSE

Sector

Miscellaneous

Industry

Business Services

Market Cap.

234.38B

Vuru Grade

58.90/100

Current Price

$102.51
+0.35 (+0.34%)

Growth Price

$40.43
Overvalued by 60.56%

Stability Price

$12.63
Overvalued by 87.68%

Company Metrics

  • P/E 38.12
  • P/S 13.15
  • P/B 8.85
  • EPS 2.69
  • Cash ROIC 11.83%
  • Cash Ratio -
  • Dividend 0.66 / 0.64%
  • Avg. Vol. 7.98M
  • Shares 2.29B
  • Market Cap. 234.38B

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, Discover Pare Deals With Extremist Groups After Rally
Bloomberg - Aug 16, 2017
Discover Financial Services said it's ending merchant agreements with “hate groups,” while Visa Inc. and Mastercard Inc. said they were cutting ties with a number of sites as part of broader reviews.
Visa Inc. (V) Ex-Dividend Date Scheduled for August 16, 2017
Nasdaq - Aug 15, 2017
Visa Inc. ( V ) will begin trading ex-dividend on August 16, 2017. A cash dividend payment of $0.165 per share is scheduled to be paid on September 05, 2017.
Visa Inc. Profits Soar on International Growth
Motley Fool - Jul 24, 2017
The electronic payments titan repurchased 17.8 million shares of stock at an average price of $93.82 per share in the third quarter, for a total of $1.7 billion.
Visa: Valuation And Growth Paradox
Seeking Alpha - Jul 31, 2017
Through the first 9 months of FY2017, Visa has only grown revenue by an aggregate of 2.33%. The Visa Europe acquisition has been a tailwind for the company, translating into phenomenal transaction and volume growth; however, this was expected.
Visa: Historical Indicators Of A Correction
Seeking Alpha - Aug 15, 2017
Visa Inc. (V) has been on a run for the last few years that even bank stocks have a hard time beating. In all that time, the stock has been trading in a bullish channel, bouncing off the bottom of the channel trend line (and going higher), and ...
Visa Inc. Reports Strong Fiscal Third Quarter 2017 Results
The FINANCIAL - Jul 21, 2017
“I'm pleased to report Visa's fiscal third quarter results which reflect strong growth in payments volume, cross-border volume, and processed transactions, which were powered by economic tailwinds in the U.S.
Visa: We're Going Over $100 - Seeking Alpha
Why Visa Inc (NYSE: V) stock is rising - FX Daily Report
3 Reasons Visa Just Delivered a Great Quarter...Again
Motley Fool - Jul 28, 2017
Investors can relax after another quarter brings yet another stellar performance from Visa Inc (NYSE:V). Looking over the latest quarter for the payments network mega cap, there is hardly one metric or number that should elicit so much as a raised ...
Visa Is Still Growing Fast
Seeking Alpha - Jul 27, 2017
Visa (NYSE: V) has shown satisfying growth and we expect the current trend of growth to continue because of the firm's strong strategic position in the industry, global economy improvements and strategic maneuvers.
Visa's Unlikely Moat
Seeking Alpha - Aug 1, 2017
Cashless via mobile payment platforms is taking off in Asia—yet the West isn't following their lead. I look at the cultural differences that restrict plastic's success in the East and hold back mobile payments in the West.
Banque Pictet & Cie Sa Buys Visa Inc, UnitedHealth Group Inc, Mastercard Inc ...
Nasdaq - Aug 9, 2017
Banque Pictet & Cie Sa initiated holdings in VanEck Vectors Oil Services. The purchase prices were between $24.13 and $31.23, with an estimated average price of $27.36.
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.

$102.51 Current Price

$40.43 Growth Price (DCF)

Overvalued by 60.56%


Growth Rate Assumed by Market: 43.87%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$12.63 Stability Price (EPV)

Overvalued by 87.68%


Discount Rate: 15.0%

$54.81 Book Price

Overvalued by 46.53%


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 $11.83 of cash for every $100 invested.
Figures in USD. Fiscal year ends in September
20122013201420152016
Free Cash Flow 4.63B 2.55B 6.65B 6.17B 5.05B
divided by
Invested Capital 40.01B 35.96B 38.57B 40.24B 64.04B
Cash ROIC 11.58% 7.09% 17.25% 15.33% 7.89%

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 $17.11 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in September
20122013201420152016
Net Income 2.14B 4.98B 5.44B 6.33B 5.99B
divided by
Stockholders' Equity 27.63B 26.87B 27.41B 29.84B 32.91B
Return on Equity 7.76% 18.53% 19.84% 21.21% 18.20%

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
2007200820092010201120122013201420152016
Free Cash Flow 505.15M 116.00M 252.00M 2.45B 3.52B 4.63B 2.55B 6.65B 6.17B 5.05B

Good Balance Sheet

V's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in September
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 4.39B 34.98B 32.28B 33.41B 34.76B 40.01B 35.96B 38.57B 40.24B 64.04B
Current Liabilities - - - - - - - - - -
Total Liabilities 4.89B 13.84B 9.09B 8.40B 8.32B 12.38B 9.09B 11.16B 10.39B 31.12B
Stockholder' Equity -501.33M 21.14B 23.19B 25.01B 26.44B 27.63B 26.87B 27.41B 29.84B 32.91B
Current Ratio - - - - - - - - - -
TL-to-TA 1.11 0.40 0.28 0.25 0.24 0.31 0.25 0.29 0.26 0.49

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
2007200820092010201120122013201420152016
Retained Earnings - 186.00M 2.22B 4.37B 6.71B 7.81B 7.97B 9.13B 11.84B 10.46B
Retained Earnings Growth - - 1,093.01% 96.85% 53.53% 16.45% 2.11% 14.51% 29.70% -11.66%

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.

$28.44 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in September
2007200820092010201120122013201420152016
Net Income -1.08B 804.00M 2.35B 2.97B 3.65B 2.14B 4.98B 5.44B 6.33B 5.99B
divided by
Revenue 3.59B 6.26B 6.91B 8.07B 9.19B 10.42B 11.78B 12.70B 13.88B 15.08B
Net Profit Margin -29.98% 12.84% 34.05% 36.78% 39.73% 20.57% 42.28% 42.81% 45.59% 39.72%

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
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 3.59B 6.26B 6.91B 8.07B 9.19B 10.42B 11.78B 12.70B 13.88B 15.08B
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.

14.98% 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
2007200820092010201120122013201420152016
Capital Expenditure - 415.00M 306.00M 241.00M 353.00M 376.00M 471.00M 553.00M 414.00M 523.00M
divided by
Net Income -1.08B 804.00M 2.35B 2.97B 3.65B 2.14B 4.98B 5.44B 6.33B 5.99B
Capital Expenditure Ratio - 51.62% 13.00% 8.13% 9.67% 17.54% 9.46% 10.17% 6.54% 8.73%

Strong Dividend History over the past 10 years

V has consistently distributed a dividend for the past 9 years. This suggests V is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in September
2007200820092010201120122013201420152016
Dividend Paid - 93.00M 318.00M 368.00M 423.00M 595.00M 864.00M 1.01B 1.18B 1.35B
divided by
Shares Outstanding - 1.39B 1.05B 739.00M 1.02B 678.00M 656.00M 631.00M 2.46B 2.41B
Dividend Paid Per Share - 0.07 0.30 0.50 0.41 0.88 1.32 1.59 0.48 0.56
Price at Year End - 49.82 86.70 69.60 101.34 148.65 220.91 264.55 78.35 78.02
Dividend Yield - 0.13% 0.35% 0.72% 0.41% 0.59% 0.60% 0.60% 0.61% 0.72%

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
2007200820092010201120122013201420152016
Shares Outstanding - 1.39B 1.05B 739.00M 1.02B 678.00M 656.00M 631.00M 2.46B 2.41B
Stock Bought Back - -100.00% 32.79% 41.95% -27.69% 50.74% 3.35% 3.96% -74.32% 1.78%
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