Wednesday, March 29, 2017

MasterCard Incorporated: A Classic Toll Road Moat

dividend growth investing, stock analysis, minimum acceptable rate of return
MasterCard Inc. (MA) Dividend Stock Analysis 2017
Toll roads. I hate paying the tolls, but they sure do make driving quicker and easier. However, businesses that are built on the toll bridge moat are typically cash cows that generate plenty of excess cash that can be returned to shareholders and make for ideal investments when purchased at sound valuations.
MasterCard's (NYSE:MA) business model is simple. Create a payment network. Get a large number of users, card holders, to use your cards. Get businesses to accept your payment network. Rake in profits. It's not quite that simple, but it's not much more complex than that.
The global payment processing market is largely a duopoly with Visa (NYSE:V) and MasterCard taking up the lion's share of all transactions. Around the globe the trend is for more transactions every year to be done without cash or checks. In my own life I can honestly say that I write about 3 checks per year with essentially every other purchase being made with my cards.
Dividend History
One of the first places that I go to determine the quality of a company is its dividend history. The dividend history gives quick insight into whether the company is growing as well as generating excess cash to send to shareholders.

dividend stock analysis, DIY, value investing, long term investing

2 comments:

  1. Mastercard & Visa for sure are dividend growth stocks. I should have got them @ a lower price :-(

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  2. I agree. MasterCard and Visa are truly buy and hold.

    ReplyDelete