Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Mastercard MA in comparison to its major competitors within the Financial Services industry. By analyzing critical 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 | 35.21 | 56.86 | 16.22 | 42.49% | $3.92 | $4.83 | 10.44% |
| Visa Inc | 30.24 | 14 | 16.29 | 11.86% | $5.84 | $6.98 | 9.89% |
| Fiserv Inc | 27.77 | 3.01 | 4.62 | 2.51% | $1.96 | $2.88 | 7.39% |
| PayPal Holdings Inc | 15.98 | 3.21 | 2.28 | 4.25% | $1.56 | $3.46 | 9.36% |
| Fidelity National Information Services Inc | 106.88 | 2.38 | 4.57 | 3.9% | $0.8 | $0.92 | 2.92% |
| Block Inc | 107.72 | 2.10 | 1.74 | 2.51% | $0.51 | $2.09 | 19.38% |
| Global Payments Inc | 18.97 | 1.10 | 2.54 | 1.39% | $0.95 | $1.5 | 5.57% |
| Corpay Inc | 18.87 | 5.48 | 4.96 | 7.03% | $0.48 | $0.73 | 3.76% |
| Jack Henry & Associates Inc | 30.86 | 6.56 | 5.34 | 4.97% | $0.17 | $0.21 | 5.9% |
| WEX Inc | 28.83 | 4.18 | 2.95 | 3.66% | $0.23 | $0.39 | 6.65% |
| Euronet Worldwide Inc | 19.54 | 4.08 | 1.49 | 2.1% | $0.09 | $0.32 | 8.87% |
| Shift4 Payments Inc | 48.51 | 6.87 | 1.65 | 3.1% | $0.1 | $0.19 | 29.32% |
| The Western Union Co | 7.50 | 10.77 | 1.06 | 32.55% | $0.24 | $0.41 | 1.18% |
| StoneCo Ltd | 13.06 | 1.41 | 1.84 | 2.52% | $0.9 | $2.14 | 15.45% |
| PagSeguro Digital Ltd | 11.43 | 1.45 | 2.18 | 3.57% | $1.77 | $0.2 | 10.15% |
| Paymentus Holdings Inc | 84.57 | 5.50 | 3.76 | 1.66% | $0.02 | $0.05 | 24.64% |
| DLocal Ltd | 17.45 | 4.66 | 3.33 | 3.8% | $0.05 | $0.06 | 34.34% |
| Evertec Inc | 33.94 | 4.27 | 3 | 2.9% | $0.07 | $0.1 | 28.47% |
| Payoneer Global Inc | 18.97 | 3.21 | 2.56 | 4.37% | $0.05 | $0.19 | 18.84% |
| Average | 35.62 | 4.68 | 3.68 | 5.48% | $0.88 | $1.27 | 13.45% |
After thoroughly examining Mastercard, the following trends can be inferred:
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The Price to Earnings ratio of 35.21 is 0.99x lower than the industry average, indicating potential undervaluation for the stock.
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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 56.86 which exceeds the industry average by 12.15x.
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The Price to Sales ratio of 16.22, which is 4.41x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 42.49% is 37.01% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.92 Billion is 4.45x above the industry average, highlighting stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $4.83 Billion, which indicates 3.8x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 10.44%, which is much lower than the industry average of 13.45%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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.
When evaluating Mastercard alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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When comparing the debt-to-equity ratio, Mastercard is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 2.16.
Key Takeaways
For Mastercard, the PE ratio is low compared to peers, indicating potential undervaluation. The PB ratio is high, suggesting investors are willing to pay a premium for its assets. The PS ratio is also high, reflecting strong revenue generation relative to market value. In terms of ROE, EBITDA, and gross profit, Mastercard demonstrates high profitability and operational efficiency. However, the low revenue growth rate may raise concerns about future performance compared to industry peers in the Financial Services sector.
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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