Visa Inc.

Methodology

Visa's fair value calculation works exceptionally well given the company's consistent earnings growth driven by secular shifts to electronic payments, cross-border transaction volume, and network effects that create a wide moat. The method captures Visa's position as a toll-collector on global payment flows with minimal capital requirements and predictable margins. Fair value estimates are highly reliable because the business model is asset-light with recurring revenue characteristics and exposure to long-term payment digitization trends.

Methodology

Visa typically commands premium PEG ratios reflecting its position as one of the highest-quality growth franchises in financial services, with durable network effects and secular payment volume growth. The PEG framework works well for Visa because growth rates are steady and supported by payment penetration trends, though investors should normalize for occasional impacts from cross-border travel disruptions or regulatory changes. Comparing Visa's PEG to Mastercard and historical ranges provides context for relative valuation within the payments duopoly.

Methodology

Visa pays a modest dividend as management prioritizes share buybacks and strategic investments in payment technology over yielding cash to shareholders, given the high-return reinvestment opportunities available. PEGY adds some incremental value by incorporating the dividend, but the primary investment thesis centers on consistent double-digit earnings growth and expanding payment volumes. For Visa investors, evaluating payment penetration trends and cross-border recovery matters far more than the modest dividend yield.