Stock (Symbol)

Visa (V)

Stock Price

$73

Sector

Financial

Data is as of

January 10, 2016

Expected to Report

Jan 28

Company Description

Visa Inc. is a payments technology company. The Company is engaged in operating a processing network, VisaNet, which facilitates authorization, clearing and settlement of payment transactions across the world. The Company provides its services to consumers, businesses, financial institutions and governments in more than 200 countries and territories for electronic payments. The Company offers fraud protection for account holders and rapid payment for merchants. The Company provides a variety of payment solutions that support payment products that issuers can offer to their account holders, such as pay now with debit, pay ahead with prepaid or pay later with credit products. The Company offers a suite of digital, eCommerce and mobile products and services. Source: Thomson Financial

Sharek’s Take

The average stock is down 23% from its highs, and is in Bear Market territory. Investors are demanding stocks they can count on, and Visa (V) fits the bill. V earns a top safety rating of 1 from Value Line, buys back stock and pays a 1% yield which make this a premium holding. The only negatives are (1) the stock is down just 11% from its highs and (2) at 25x earnings it doesn’t have upside to my 2016 Fair Value. Profit growth is expected to be just 10% and 11% the next 2 qtrs, so I don’t see a lot of demand now, and you’re not getting the stock on sale like a lot of other stocks are. Still, this is a great company long-term, and if you sell out you’ll probably regret it. I see V as a dependable 17% grower, but the stock’s fairly valued here.

One Year Chart

Last qtr Visa announced it plans to merge with Visa Europe and I felt that would boost numbers — and the stock — but it didn’t. Last qtr the company had 13% profit growth on 11% sales growth, and missed estimates by a penny. Estimates for the next 2 qtrs fell 4 cents each and 2016’s estimate dropped from $3.00 to $2.88. This stock looks OK.

Fair Value

The beauty in this stock can be seen in the Profit History table and the ten-year chart. Such a great buy-and-hold stock. The only issue was the P/E was a little high when it was 27. Now V sells for 25x earnings and that’s where I think it should be.

Bottom Line

Visa is a stock I think investors can count on during these turbulent times. The stock has a high safety rating and management pays a dividend as well as buying back stock. I feel this is a great company to buy-and-hold and hopefully make 17% annually. The only negatives are profit growth might be slow the next few qtrs and the stock’s fairly valued here. V ranks 26th of 35 stocks in the Growth Portfolio Power Rankings and 13th of 32 stocks in the Conservative Portfolio Power Rankings.