How to Buy Mastercard Stock Now, Forecast and Dividend Guide
Mastercard is the company behind the second-largest payments networks globally. Mastercard shares record a continuous appreciation with an exponential growth since its IPO in 2006. Market participants maintain their bullish sentiment about the future price movements in Mastercard stock and analysts forecast potential for significant price increase in the upcoming period.
Numerous factors make Mastercard stock an attractive buy opportunity. The company’s business model, its activities to capture a larger market share and strategic focus to increase earnings made from different streams makes this stock even more desirable for market participants. Moreover, aside from the fundamental factors, technical analysis also points toward potential buy opportunities for MA stock based on its historical price movements.
Mastercard Inc. was founded in 1966 when several banks formed the Interbank Card Association (ICA), which organised, managed, and controlled different aspects related to credit cards. Moreover, ICA was responsible for overseeing authorisations, clearing and settlement, and it was the organisation behind Master Charge or today's MasterCard. The group of banks that formed ICA and are considered the founders of Mastercard are United California Bank, Wells Fargo, Crocker National Bank and the Bank of California. The first two banks merged with Wells Fargo Bank.
The company is headquartered in New York, U.S., but it has offices in the Americas, Asia, Europe, Middle East, Australia and Africa. Mastercard offers its services in more than 200 countries and territories and in more than 150 currencies. The company has processed $4.8 trillion worth of purchases transactions in 2020, which places the company at the second position among the largest payment processors while Visa takes the first position.
Mastercard Stock Historical Price
Mastercard stocks are constituent shares in more than 15 indices in the U.S. and other countries. Some popular indices that include Mastercard shares are S&P 100, DJ Growth, S&P 500 and NYSE Composite. The company went public in 2006, and the number of Mastercard shares available in 2021 was 986,775,042 shares outstanding. Mastercard market capitalisation has climbed to more than $380 billion during the first half of 2021.
The Mastercard stock (MA) is among the stocks that have moved in a clearly defined, strong trend since it became available to the public in 2006. Mastercard stock price recorded an increase of a few thousand per cent since 2006 when it was traded for $4.5, reaching a high price of more than $390 in July 2021.
MA stock recorded three major price retracements during its long bull run, but it has managed to bounce back and suppress the previous highs. The first significant price retracement occurred in the second half of 2018, when the price fell by more than 20% in a couple of months. It declined from a level of approximately $222 per share down to $175 per share. The second price retracement, which is also the largest one, was recorded in the first quarter of 2020 when the price hit a low of $211 from a high level of $339 or a decrease of more than 35%. The third significant price retracement appeared in October 2020 when Mastercard stock price depreciated around 18%.
According to calculations performed on an investment calculator available in the investors’ section on Mastercard’s corporate website, the total return generated by its stock has outperformed some of the most popular indices. Accordingly, since 2006 Mastercard stock has generated a total return of around 5.700%, beating the total return generated by S&P 500 (212%), NASDAQ (519%) and DOW 30 (192%). A comparison of Visa vs Mastercard stock price increase in the last five years shows that Mastercard stock also outperforms its main competitor. Mastercard stock experienced an overall price appreciation of around 280%, while Visa stock increased by approximately 210% during the same period.
Why Invest in Mastercard Share? Points to Consider
Before you decide to buy Mastercard stock, you need to consider different aspects associated with the company and its shares. Some of the crucial aspects are the company fundamentals, changes in the stock price in the past, and the analysts' forecasts and market sentiment for MA stock.
More specifically, aspects that make Mastercard stock an attractive buy opportunity are:
- Mastercard earns fees from each payment that is processed, and it processes millions of payments daily, and the number is expected to grow further.
- Many consider Mastercard a crucial participant and intermediary in the payment environment, which is positive for company revenues and overall financial performance.
- Mastercard's innovative and proactive approach toward developing and implementing new technology and new payment models create additional growth opportunities.
- Mastercard strategic moves to enter into partnerships means that it is expanding its growth opportunities.
- The increased acceptance of card-base and cashless transactions means that Mastercard revenue can grow in the future with the increase of cardholders.
Mastercard Business Model and Share Price
While the company name is heavily associated with credit and debit cards, Mastercard is predominantly a payment network that links customers with merchants. The company's network offers a way for financial institutions to be connected, enabling transactions between parties domestically and internationally.
Mastercard business model revolves around innovative payment processing products and solutions and consulting services offered to a vast range of clients, from individuals to government institutions. The company develops solutions to increase the payment security levels and reduce harmful effects from fraudulent activities that might emerge in the transaction cycle. Mastercard also provides information and outsourcing services to a large number of financial institutions. Mastercard offers its payments and transactions products and services under three brands Mastercard, Maestro and Cirrus.
The company has multiple revenue streams, but predominantly the Mastercard business model makes money through fees paid by financial institutions. The fees are charged on a per-transaction basis and a portion of the cardholders' gross dollar volume of transactions. Other revenue streams are fees generated from authorisation, clearing, settlement, and cross-border or domestic transactions. Mastercard also makes revenue from services such as consulting, research, data analytics, loyalty rewards, safety and security, etc. The company states that its technology supports 1.9 billion cards, accepted in 35.9 million locations.
Mastercard Stock Dividend Information
Since 2006, Mastercard has paid cash dividends regularly four times per year, and in 2021 it has paid a quarterly dividend of $0.44 or $0.04 higher than the quarterly dividend paid in 2020. The total Mastercard stock dividend paid in 2020 was $1.76. This may fluctuate from one year to the next, and while the dividend is paid yearly, it doesn’t record a constant growth since it was first paid. In addition, the dividend yield also fluctuates with the amount of cash dividend paid to the shareholders, and it doesn't show any stable growth.
A positive aspect of the company's dividend is that it has a dividend cover ratio of around 5, which is higher than the sector median. Also, the dividend payout ratio for Mastercard is advantageous since it is approximately 27%, while anything above 50% is considered negative. Mastercard stock dividend yield for 2021 is around 0.52%, meaning that the yield generated by this stock is lower than the sector median.
Mastercard Stock Forecast and Prediction
Several financial institutions and analysts follow the Mastercard stock. In fact, they track its performance and factors that might affect its price. According to the company's website, analysts from well-known companies such as Barclays, BMO, Citigroup, Credit Suisse, Deutsche Bank… cover the movements in MA stock price.
Mastercard stock forecast shows a bullish sentiment among analysts and investors about the future changes in its price. The CNN Business stock price forecasts section publishes the expected price levels for a 12-month period based on forecasts provided by 30 analysts. Accordingly, the expected high price is projected at $482. The low price is at a level of around $385 per share. The median target price is of about $447 per share.
The positive forecasts are also evident with other analysts, which anticipate upward movements in Mastercard share price. Based on the anticipated price movements, investment analysts agree that this stock comes with a "buy" rating. Also, the Q-Factor score published by Forbes gives the stock a "top buy" rating for the near future. This is in line with forecasts from other analysts. Anaysis using technical indicators also shows that this asset is a potential buy opportunity.
Where Can I Buy Mastercard Stock?
Traders need to have a trading account with a trustworthy broker like ZFX in order to invest in Mastercard stock. But who exactly is this broker?
ZFX: Buy Mastercard stock with a low spread
ZFX broker gives traders an opportunity to trade Mastercard stock through CFDs. This eliminates the complexity associated with the direct purchase of shares. What's more, traders can trade the MA stock CFDs with low spreads and zero deposit fees on its ZFX MT4 trading platform. You'll find live Mastercard stock quotes on the ZFX website and price quotes in real-time for many financial assets.
How to Buy Mastercard Stock Now
Buying Mastercard stock through the ZFX MT4 platform doesn't require too much effort. In fact, you can start trading by following few simple steps:
- 1 - Register with ZFX
- 2 - Verify your ZFX account
- 3 - Make your first deposit
- 4 - Buy Mastercard stock
A more detailed insight for each step is provided next.
1 - Register with ZFX
Buying Mastercard stock starts when you open an account with ZFX broker. This is as simple as it gets. First, you need to click on "Open an account" or "Accounts" on the ZFX website. The, hit "Open a Live Trading Account", as shown on the following image.
After selecting an option to open an account, the following window will appear.
To complete the registration process, simply fill in the required information. After that, the form will guide you through the next steps.
2 - Account verification
You then need to verify your account by providing the required documents. Accordingly, ZFX accepts any of the following: national ID, passport, or driver's license. You will scan specific pages as instructed by ZFX. Traders also need to very their valid bank account. Do so by uploading a copy of the bank statement or a particular page from the bank book.
3 - Make your first deposit
ZFX aims to simplify the trading process for its clients by offering simple methods for traders to deposit funds. Hence, when you log in to your account, you simply go to the "deposit" section and follow the instructions. Traders may fund their accounts through Bank Wire or Credit Cards. ZFX doesn’t charge any deposit or withdrawal fees. The spread for Mastercard is 0.3, while ZFX offers leverage of 1:20, which is a trading margin of only 5%.
4 - Buy Mastercard stock
To buy Mastercard stock, first, download the ideal ZFX MT4 trading platform on your preferred device. The available options are as follows.
When you install the MT4, you need to open the platform. Then, log in to your account with the information sent to your email. Go to the lower-left section, select your account and enter the required user id and password. Make sure that you choose the "ZealCapitalMarketSC-Live" server. After you log in, go to the "market watch" section. Then, select Mastercard stock or any other available assets, and double click on the asset.
In the next window, you can see the buy and sell prices. You buy the asset by hitting the buy button after setting the preferred trading elements (volume, type of order, etc.).
Bottom Line: Should I Buy Mastercard Stock Today?
Mastercard stock enjoys a positive sentiment which is evident from the forecasts provided by different investment analysts. However, the potential for upward movement in MA stock price comes from several factors. These relate to the company business model and its fundamentals.
If you feel convinced and wish to trade Mastercard stock, ZFX is a fast, efficient and regulated broker. You can register in only a few steps and then add MA to your portfolio effortlessly.