Mastercard, Inc. (MA)

(20 October 2016)

MA Business Summary

MasterCard Incorporated (MA), a leading global payment solutions company, provides a variety of services in support of the credit, debit and related payment programs of about 22,000 financial institutions and other types of entities.

MA Fundamentals

• Price to Earnings: 30.21
• Earnings Per Share: $3.48
• Market Cap: 112.2B
• Current Ratio: 1.70
• Return on Equity: 64.53%
• Dividend Yield: 0.69%
• Debt to Capital: 35.2%

Income Statement ($ in Millions)

• Net Revenues for 6 Months Ended increased $520.
• Operating Income increased $126.
• Net Income increased $1.
• Basic EPS increased from $1.70 to $1.76.
• Comprehensive Income increased $213.

Cash Flow Statement ($ in Millions)

• Total Cash Flow Provided by Operating Activity increased $335.
• Cash and Cash Equivalents at end of period decreased $136,271.
• Cash Used in Investment Activity decreased $727.
• Net Cash used for financing activities increased $78.

Balance Sheet ($ in Millions)

• Total Current Assets decreased by $14.
• Total Assets increased by $32.
• Total Current Liabilities increased by $193.
• Total Liabilities increased $225.
• Total Stockholder’s Equity decreased $193.

Highlights from 10-Q

• For the three and six months ended June 30, 2016, our net revenue increased 13% and 11%, or 14% for both periods on a currency-neutral basis, respectively, versus the comparable periods in 2015, primarily driven by increases across our revenue categories, partially offset by higher rebates and incentives. Our processed transactions increased 14% for both periods, MasterCard-Branded GDV increased 11% and 12% and cross border volumes increased 10% and 11%, on a local currency basis, respectively, versus the comparable periods in 2015.

• For the three and six months ended June 30, 2016, operating expenses increased 15% and 20%, respectively, versus the comparable periods in 2015.

• For the three and six months ended June 30, 2016, the effective tax rate was 28.0% and 28.1%, respectively. The effective tax rate increased 2.3 percentage points and 3.3 percentage points, respectively, versus the comparable periods in 2015, due to the lapping of foreign tax credits recorded in 2015 and lower repatriation benefits in the current year.

Entry and Exit Points

• Entry
  • $77
• Exit
  • $100
    • Currently trading at $102. Right now this smells of extremely overvalued.
    • Their balance sheets and income statements are okay, not great, not worth their rise in share price to over $100.