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MasterCard (MA) Hits 52-Week High on Upbeat 2017 Guidance


On Sep 11, the stock of MasterCard Inc. MA hit a 52-week high of $141.99. The rise in the stock is believed to have been driven by an upbeat outlook provided in the investors’ conference held last week.

In a year, the stock has returned 42.8%, significantly outperforming gains of 25.3% logged by the industry and 15.2% by the S&P 500 index.

Investors favorably viewed this Zacks Rank #3 (Hold) company’s strong revenue growth outlook provided for 2017. The company now projects revenue growth in the "high end of low double-digits" percentage range, up from previous guidance of "low double-digits."

MasterCard expects to reap this revenue growth from nearly $45 trillion of personal consumption expenditure and approximately $180 trillion in net flows in the business-to-business, peer-to-peer and business-to-consumers categories.

The 2016-2018 earning per share CAGR was updated by the company to approximately 20% from “mid- teens” earlier. Moreover, it expects slight benefit from foreign exchange in 2017.

MasterCard’s vast growth opportunity in electronic payments makes it hopeful of lapping strong earnings growth and having ample room to return cash to its shareholders.

The company targets growth from its card offerings in different verticals — consumer credit, debit, commercial prepaid. Its continuous investments in physical-digital convergence will keep it ahead in an industry witnessing rapid technology usage.

Investors also favorably view the company’s plans of capital deployment. These include the preservation of a strong balance sheet, liquidity and credit ratings, investments in organic opportunities in mergers and acquisitions, returning excess cash with more emphasis on repurchases, and gradual and disciplined migration to more a normalized mix of debt and equity.

The company’s outlook testifies to its robust business model, strong growth prospects and a solid balance sheet in a thriving payments’ industry.

Stocks to Consider

Green Dot Corp. GDOT has been witnessing upward estimate revisions for the last 30 days. In one year, the company’s share price has risen more than 99%. It flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vantiv Inc. VNTV has been witnessing upward estimate revisions for the last 60 days. Further, the stock has surged nearly 35.1% in the last 12 months. It currently carries a Zacks Rank #2 (Buy).

Western Union Co. WU has witnessed upward estimate revisions for the last 60 days. It beat estimates in two of the last four quarters, with an average positive surprise of 4%. It currently holds a Zacks Rank #2.

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