Mastercard

Methodology

Mastercard's payments network generates highly predictable earnings growth driven by secular shifts to electronic payments and global transaction volume growth. Minimal capital requirements and network effects create exceptional visibility into sustainable earnings power. The stable, high-quality business model makes this calculation reliable and straightforward compared to most financial companies.

Methodology

Mastercard consistently commands premium PEG ratios reflecting exceptional business quality, secular growth tailwinds, and oligopolistic market structure with Visa as the primary competitor. While ratios appear expensive versus traditional financials, the asset-light model and growth durability justify valuations. Compare to Mastercard's historical range and Visa rather than absolute thresholds or banking peers.

Methodology

Mastercard offers a modest but steadily growing dividend as management prioritizes aggressive buybacks alongside moderate payout increases. The dividend adds some value though capital appreciation from compounding growth dominates total returns. For this premium growth compounder, reinvestment and buybacks matter more than current yield in driving shareholder value.