Mastercard’s priceless beat

Net income > ↑21%, Net revenue > ↑18%, beating analysts estimates…priceless

Mr. Ajay Banga, MasterCard’s President & CEO, has always railed against cash, from printing it to carrying it. During an offsite meeting, when challenged by his leadership team to show how much cash was in his wallet, he was able to ruffle up a grand total of $2 (The team did call him a cheapskate). And now, it looks like he is able to convince more and more people to switch from stale currency to plastic.

Who said being a middleman is bad, MasterCard was able to rustle up a tidy revenue of $3.4 billion for the third quarter 2017. Charging a few points to the merchants for moving money to them for their sales doesn’t look like an expensive process, the net income was $1.4 billion. An EPS of $1.34 per share handily beat the analysts’ estimate of $1.23 a share. I guess the Christmas season is fast approaching as the company decided to share the good fortune with its investors with a total dividend payout of $35 million and share buyback of $838 million.

Madonna, the (pop star) Zen master, had it right in 1984 with ’Cause we are living in a material world’: the business now is not how many have it in their wallet but also how much do they spend on the card (side note — rumor has it to keep AMEX Black Card eligibility you need to spend $250K annually). We are sure that the new MasterCard partnership with ADP to have your pay(checks) as paymastercards will help and so also will the exclusive card at Costco Japan (Visa beat it in the US).

This was originally published as AlphaNews newsletter on Wednesday, November 1st. Subscribe to our newsletter to get timely insights like this
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