#4 - Mastercard (NYSE:MA)
Another staple of Berkshire Hathaway’s portfolio comes from payment processing stocks. One reason for that is that these companies benefit from the network effect. Buffett owns shares of Visa Inc. (NYSE: V), American Express Co. (NYSE: AXP), and Mastercard (NYSE: MA). As is the case in the energy sector, you’ll be doing well with any of these picks, but in the short term, Mastercard may be the best choice.
One reason to believe in that is the company’s focus on preventing threats posed by AI. Privacy and security are becoming key issues for consumers. And the rise of AI is increasing the threats of fraudulent purchases, and subsequent chargebacks. In 2023, the cost of cybercrime was estimated to be over $8 trillion. Mastercard is helping to address these threats with its $2.65 billion acquisition of Recorded Future, the world’s largest threat intelligence firm.
As of September 24, 2024, MA stock trades at a forward P/E of 34.5x and near its 52-week high. That’s a premium valuation and may keep some investors away. But a 12-year streak of rising dividends and analysts increasing their price targets suggest a long runway for growth.
About Mastercard
Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions.
Read More - Current Price
- $489.41
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 23 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $512.08 (4.6% Upside)
