Recent news about the fact that the merger Visa Inc. (NYSE:V) proposed to acquire Plaid has been terminated is what I view as a strong signal of Visa’s inherent value to shareholders right now. The fact that Visa is so dominant in the payment processing business should be enough reason to own this name over the long-term.
Indeed, Visa remains a top pick of mine in the technology sector for long-term investors. I think the absolute size of the payment processor relative to its peers provides Visa with a massive moat that is essentially insurmountable. Others might bet on Mastercard as a company that could catch up, but this has never been an imminent threat and I don’t think ever will.
I think for another company to erode Visa’s market share advantage is essentially impossible at this stage in the sector’s life cycle. Visa has market dominance that is insurmountable in my view, and with transaction volumes only likely to continue to increase rapidly over time, long-term profitability growth is foreseeable for an extremely long time. Credit only passed cash as the primary payment method this past year, so the runway for growth for Visa is incredibly long and attractive.
I think every technology investor would do well to consider Visa on any dips moving forward. I think this is a world-class company with a moat that is so wide it’s impossible to cross, making this a cornerstone holding for the long-term tech investor in my view.
Invest wisely, my friends.
