Mastercard (MA) Shares Gap Up After Earnings Beat

Shares of Mastercard Incorporated (NYSE:MA) gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $173.35, but opened at $172.93. Mastercard shares last traded at $174.86, with a volume of 3031627 shares trading hands.

The credit services provider reported $1.14 earnings per share for the quarter, beating analysts’ consensus estimates of $1.12 by $0.02. The firm had revenue of $3.31 billion during the quarter, compared to analyst estimates of $3.25 billion. Mastercard had a net margin of 38.70% and a return on equity of 78.38%. Mastercard’s revenue for the quarter was up 20.2% compared to the same quarter last year. During the same period last year, the firm posted $0.86 earnings per share.

The firm also recently announced a quarterly dividend, which will be paid on Friday, February 9th. Stockholders of record on Tuesday, January 9th will be given a dividend of $0.25 per share. This represents a $1.00 annualized dividend and a dividend yield of 0.57%. This is an increase from Mastercard’s previous quarterly dividend of $0.22. The ex-dividend date is Monday, January 8th. Mastercard’s dividend payout ratio (DPR) is 27.40%.

Mastercard announced that its board has authorized a stock repurchase program on Monday, December 4th that allows the company to buyback $4.00 billion in shares. This buyback authorization allows the credit services provider to purchase shares of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s management believes its shares are undervalued.

Several analysts have recently weighed in on MA shares. Mizuho upgraded Mastercard from a “neutral” rating to a “buy” rating in a research report on Thursday, January 4th. Zacks Investment Research downgraded Mastercard from a “buy” rating to a “hold” rating in a research report on Wednesday, January 3rd. Citigroup lifted their target price on Mastercard from $157.00 to $167.00 and gave the stock a “buy” rating in a research report on Wednesday, October 18th. SunTrust Banks lifted their price objective on Mastercard to $180.00 and gave the company a “buy” rating in a report on Wednesday, November 1st. Finally, Royal Bank of Canada downgraded Mastercard from a “top pick” rating to an “outperform” rating and set a $130.00 price objective for the company. in a report on Thursday, January 4th. One investment analyst has rated the stock with a sell rating, three have issued a hold rating and twenty-nine have given a buy rating to the stock. The stock presently has an average rating of “Buy” and an average target price of $174.44.

In other news, insider Edward Grunde Mclaughlin sold 17,167 shares of the business’s stock in a transaction dated Tuesday, January 2nd. The stock was sold at an average price of $151.81, for a total transaction of $2,606,122.27. Following the sale, the insider now owns 47,901 shares in the company, valued at $7,271,850.81. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 0.30% of the stock is currently owned by insiders.

Institutional investors have recently added to or reduced their stakes in the stock. Global Trust Asset Management LLC purchased a new stake in shares of Mastercard during the fourth quarter worth approximately $1,336,000. Aperio Group LLC increased its position in shares of Mastercard by 4.1% during the fourth quarter. Aperio Group LLC now owns 548,417 shares of the credit services provider’s stock worth $83,008,000 after purchasing an additional 21,754 shares in the last quarter. Telemus Capital LLC increased its position in shares of Mastercard by 53.7% during the fourth quarter. Telemus Capital LLC now owns 49,889 shares of the credit services provider’s stock worth $7,552,000 after purchasing an additional 17,424 shares in the last quarter. Cedar Capital LLC increased its position in shares of Mastercard by 122.3% during the fourth quarter. Cedar Capital LLC now owns 9,431 shares of the credit services provider’s stock worth $1,427,000 after purchasing an additional 5,188 shares in the last quarter. Finally, Harel Insurance Investments & Financial Services Ltd. increased its position in shares of Mastercard by 119.5% during the fourth quarter. Harel Insurance Investments & Financial Services Ltd. now owns 2,195 shares of the credit services provider’s stock worth $332,000 after purchasing an additional 1,195 shares in the last quarter. 75.66% of the stock is owned by hedge funds and other institutional investors.

The company has a quick ratio of 1.66, a current ratio of 1.66 and a debt-to-equity ratio of 0.83. The stock has a market cap of $185,090.00, a PE ratio of 47.90, a P/E/G ratio of 1.82 and a beta of 1.26.

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About Mastercard

MasterCard Incorporated is a technology company that connects consumers, financial institutions, merchants, governments and businesses across the world, enabling them to use electronic forms of payment. The Company operates through Payment Solutions segment. The Company allows user to make payments by creating a range of payment solutions and services using its brands, which include MasterCard, Maestro and Cirrus.

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