In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Mastercard MA in comparison to its major competitors within the Financial Services industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Mastercard Background
Mastercard is the second-largest payment processor in the world, having processed close to over $9 trillion in volume during 2023. Mastercard operates in over 200 countries and processes transactions in over 150 currencies.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Mastercard Inc | 38.21 | 62.37 | 17.30 | 43.91% | $4.25 | $5.47 | 12.8% |
| Visa Inc | 29.99 | 14.87 | 16.48 | 13.92% | $6.45 | $7.13 | 8.06% |
| Fiserv Inc | 38.77 | 4.12 | 5.89 | 2.02% | $2.39 | $3.21 | 7.02% |
| PayPal Holdings Inc | 18.69 | 3.88 | 2.62 | 4.95% | $1.67 | $3.65 | 5.78% |
| Fidelity National Information Services Inc | 92.47 | 2.95 | 5.07 | 1.39% | $0.8 | $0.95 | 2.68% |
| Block Inc | 67.31 | 2.32 | 1.95 | 1.02% | $0.6 | $2.23 | 11.21% |
| Global Payments Inc | 19.84 | 1.17 | 2.70 | 1.39% | $1.01 | $1.65 | 5.08% |
| Corpay Inc | 23.96 | 8.32 | 6.32 | 8.38% | $0.51 | $0.77 | 2.9% |
| Jack Henry & Associates Inc | 35.24 | 7.29 | 6.07 | 5.58% | $0.18 | $0.23 | 4.73% |
| WEX Inc | 21.86 | 4.08 | 2.72 | 5.95% | $0.28 | $0.42 | 2.16% |
| Shift4 Payments Inc | 54.65 | 8.60 | 2.01 | 5.7% | $0.13 | $0.23 | 29.83% |
| Euronet Worldwide Inc | 14.55 | 3.23 | 1.25 | 11.76% | $0.18 | $0.41 | 11.47% |
| The Western Union Co | 5.56 | 5.64 | 0.90 | 48.43% | $0.21 | $0.38 | -5.63% |
| StoneCo Ltd | 11.23 | 1.34 | 1.73 | 3.29% | $1.13 | $2.25 | 11.86% |
| Payoneer Global Inc | 32.77 | 4.86 | 3.64 | 4.87% | $0.06 | $0.2 | 15.86% |
| Paymentus Holdings Inc | 93.35 | 6.69 | 4.40 | 2.1% | $0.02 | $0.06 | 32.55% |
| PagSeguro Digital Ltd | 8.26 | 1.08 | 1.66 | 3.59% | $1.83 | $-0.02 | 6.74% |
| DLocal Ltd | 18.70 | 5.30 | 3.53 | 10.06% | $0.06 | $0.07 | 6.29% |
| Evertec Inc | 31.45 | 4.37 | 2.77 | 6.44% | $0.09 | $0.11 | 26.88% |
| Average | 34.37 | 5.01 | 3.98 | 7.82% | $0.98 | $1.33 | 10.3% |
By analyzing Mastercard, we can infer the following trends:
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Notably, the current Price to Earnings ratio for this stock, 38.21, is 1.11x above the industry norm, reflecting a higher valuation relative to the industry.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 62.37 which exceeds the industry average by 12.45x.
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With a relatively high Price to Sales ratio of 17.3, which is 4.35x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 43.91% that is 36.09% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.25 Billion, which is 4.34x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $5.47 Billion, which indicates 4.11x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 12.8% is notably higher compared to the industry average of 10.3%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Mastercard can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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When considering the debt-to-equity ratio, Mastercard exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 2.47, which can be perceived as a positive aspect by investors.
Key Takeaways
For Mastercard, the PE, PB, and PS ratios are all high compared to industry peers, indicating potential overvaluation. On the other hand, Mastercard's high ROE, EBITDA, gross profit, and revenue growth suggest strong operational performance and growth prospects within the Financial Services sector. Comparing these metrics with industry peers can provide insights into Mastercard's relative position in the market.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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