Visa Inc (NYSE:V) is up nearly 50% in the past year and there are plenty of reasons the credit card provider is a great buy. The company has continued to grow sales even though its services are already widespread and found all over the world. In 2017, sales were up 22% year-over-year and in three years revenues have grown 45%.
If great top-line growth wasn’t enough to convince you the stock is a great buy, consider that Visa’s net profit margin has averaged more than 40% in the past four years. With strong fundamentals, it’s no surprise why Visa’s stock trades at more than 40 times its earnings.
Growth for the credit card company seems endless as we see consumer debt levels continue to climb and the popularity of Bitcoin only underscores the popularity of non-cash transactions. These days private companies, including retailers, also offer their own store credit cards, often branded with Visa or another major credit card processor.
Visa is also what I would consider a recession-proof stock. If times are good, consumers will increase spending, and if times are bad, people might still end up dependent on credit cards rather than cash, which may be scarce when times are tough.
Regardless of if you decide to go with Mastercard Inc (NYSE:MA) or Visa, it’s hard to go wrong with either one, given the strength of the industry. It’s unlikely that credit cards will lose their popularity anytime soon, and debt problems might only make them more popular among consumers.
Visa is a great company with a bright future, and the stock would be a solid addition to any portfolio.
