Visa: License To Buy

Company Overview:

Visa Inc. (V) is the world’s largest global payments company, with a proprietary network that interlinks banks, retail merchants and payment houses around the world. It is part of a unique league of financial services companies that do not issue cards or extend credit to customers, but instead offer payments products and services in partnership with banks and merchants to facilitate the transfer of money.

The company, headquartered in Foster City, California, was recently added as a component of the Dow Jones Industrial Index (Dow 30), along with the Goldman Sachs Group, Inc. (GS) and Nike, Inc. (NKE). With Visa’s purchase volumes making up a substantial chunk of total US retail sales, the company’s financial performance is a primary indicator of the level of consumer spending in the American economy.

Read More : V - AXP - DFS 

Visa Investors Surprised By Earnings Miss

Visa Inc. (V), the world’s largest payment processing company by revenues, reported its fourth quarter (4Q) earnings for fiscal year (FY) 2013 on October 30. The results were modest and failed to capture the interest of investors, who were expecting a stellar performance, given that card service companies have performed quite well in recent quarters. The share price of Visa fell 2% following its earnings release.

Earnings Overview

For the latest quarter, Visa reported a net income of $1.2 billion, up 15% from the same quarter last year. Diluted EPS (earnings per share) were $1.85, a 20% better result than $1.54 in 4QFY12. Net income for the fiscal year ending September 30, 2013 increased 18% to $5 billion, which translated to per share earnings of $7.59. EPS was 23% higher than it was in FY12 but missed analyst estimates by a minute 0.07%.

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Growth Portfolio Semi-Finals: Visa Vs. Polaris

In the semi-finals round of the Growth Portfolio playoffs we have #10 seeded Polaris Industries Inc. (PII) taking on #3 seeded Visa Inc. (V). Visa is a global payments and technology company that connects consumers, financial institutions, and merchants. Polaris designs, engineers and manufactures off-road vehicles including all-terrain vehicles and side-by-side vehicles for recreational and utility use, snowmobiles, and on-road vehicles including motorcycles and small electric vehicles.

The following table depicts the recent earnings reports for each company:

Ticker	Earnings Date	Actual EPS ($/share)	Estimated EPS ($/share)	Actual Revenue ($ in billions)	Estimated Revenue ($ in billions)
PII	22Oct13	1.64	1.61	1.10	1.05
V	30Oct13	1.85	1.85	3.02	3.04

Polaris is up 56.32% in the past year excluding dividends (up 57.61% including dividends), while Visa is up 35.83% excluding dividends (up 36.4% including dividends). Both are beating the S&P 500, which has gained 23.57% in the same time frame. This matchup will be played out in a best of seven game series based on the metrics below. For a complete list of all the metrics utilized in the seven game series click here. Not all the metrics will be looked at if a team can win and win early. This matchup will determine the winner which will go on to play for the Super Bowl against either General Motors (GM) or Gilead Sciences (GILD).

Forward P/E

Forward P/E is the metric of how many times future earnings you are paying up for a particular stock. The earnings portion of the ratio I utilize is the earnings value for the next twelve months or for the next full fiscal year. I like utilizing the forward P/E ratio as opposed to the trailing twelve month P/E ratio because it is an indication of where the stock is going to go in the future. 

Read More : Visa Vs. Polaris

Visa Company Description

Visa Inc. (V) is the world’s largest card services companies, with operations in all continents and a network that connects banks, merchants, and payment providers through a single transaction network. The company has four major business segments namely: Service Revenues, Data Processing Revenues, International Transaction Revenues, and Other Revenues that includes the independently run subsidiary, Visa Europe Services Inc. Currently, Visa’s largest geographic segment is the US, with a 55% share of revenues. Although its international segments are growing faster on the back of consumer spending growth in emerging markets, Visa was recently added as a component of the Dow Jones Industrial Index (Dow 30). Read More: V

Visa Earnings Fare Well, Raises Buyback

Visa Inc.’s (V) fiscal fourth-quarter 2013 (ended Sep 30, 2013) operating earnings of $1.85 per Class A common share were in line with the Zacks Consensus Estimate but outpaced the prior-year quarter figure of $1.54 per share. Results in the reported quarter included a restructuring reserve of about 4 cents per share.

Net income increased 15.2% to $1.19 billion from $1.04 billion in the year-ago quarter. Including reversal of tax reserves of $627 million or 93 cents per share, reported net income in the year-ago quarter was $1.66 billion or $2.47 per share.

Alongside, total operating revenues for the reported quarter were $2.97 billion, up 8.9% year over year but lagging the Zacks Consensus Estimate of $3.02 billion. Growth was driven by higher card spending and strong performance across all segments.

Service revenues increased 9.6% year over year to $1.39 billion and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on the current quarter activity. Data processing revenues grew 11.7% from the prior-year period to $1.19 billion. Read more.

Visa Inc. PJSC "Ukrsotsbank", UniCredit Bank™, revealed names of winners of "With Visa

Visa Inc. (V), with a current value of $152.58B, started the session at $195.38. During today’s session, V traded between $195.00 to $196.12 with a trailing 52-week range being $138.53 to $205.25. 

V shares are currently priced at 22.98x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s 22.52x earnings multiple. And for income investors, the company pays shareholders $1.60 per share annually in dividends, yielding 0.80%.

In a review of the consensus earnings estimate this quarter, 30 sell-side analysts are looking at $2.16 per share, which would be $0.23 better than the year-ago quarter and a $0.02 sequential decrease. What we find to be interesting is that the full-year EPS estimate of $8.87 is a $1.28 improvement when compared to the previous year’s annual results. Read more.

Visa (V) Leads The Day Higher

The Dow component that led the way higher today was Visa (NYSE:V), which sported a 95-cent gain (+0.5%) bringing the stock to $197.37. Volume for Visa ended the day at 2.7 million shares traded vs. an average daily trading volume of 3.3 million shares.

Visa has a market cap of $102.49 billion and is part of the financial sector and financial services industry. Shares are up 31.4% year to date as of Monday's close. The stock's dividend yield sits at 0.8%.

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. Read more.