_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Mastercard Incorporated. (XNYS:MA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MA
Name:
MASTERCARD INCORPORATED. (XNYS:MA)
Sector:
1.49B
Industry:
Credit Services
CEO:
Mr. Ajaypal Banga
Total Employees:
24,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -1.05% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MASTERCARD INCORPORATED.(MA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
322.56
One Month Price Target:
$324.47
Six Month Price Target :
$334.02
Likely Price in One Year's Time:
Ticker:
$345.48
Likely Trading Range Today Under (Normal Volatility)
$321.39
Price Upper limit ($) :
$324.02
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$306.81
This week:
$287.34
This month :
$252.12
Other Primary facts
Market Cap:
313.18B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
966.38M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.61%
-12.73%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$395.64
$362.10
$249.48
$283.02
Medium risk (<10%) entry points
Buy Call
Sell Call
$351.18
Buy Put:
Sell Put:
$344.02
$293.84
$301.10
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MA
Sharpe Ratio:
1.47%
Comparison:
MA, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -21.04% lower than the industry
& is -35.60% lower than the market/S&P 500 average
Average Returns/Yield of
MA
Daily returns:
0.04%
Weekly returns:
0.22%
Monthly returns:
0.88%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -44.53% below industry average
Classification:
MA, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
MA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.40%
Weekly Volatility:
5.36%
Monthly Volatility:
10.73%
Yearly Volatility:
37.16%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.58%
Volatility in last five trading days has been -75.89% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.88%
Weekly VaR:
-10.92%
Monthly VaR:
-21.84%
How Much Can the price of
MA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-75.64%
This translates to price declining to:
$261.90
This translates to price declining to:
$78.56
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
MA is a 54.12% riskier investment compared to the market/S&P 500 & is 32.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -27.30% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MA
Beta in relation to market/S&P 500--1.06
Expected beta in 1 year's time:
0.784
Expected beta in 3 year's time:
1.109
Unlevered (debt free) Beta:
0.389
Beta in relation to Nasdaq (XNAS):
0.952
Beta in relation to all global stocks::
0.856
Beta Comparison & Analysis
Beta of competitors/peers::
1.089
Beta is -2.89% lower than peers
Average Industry Beta:
1.332
Beta is -20.63% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
102.92%
Sustainable growth rate is 205.04% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.002
Alpha is -97.31% below industry average alpha yield
Alpha is 12% compared to market & is healthy
Analysis of Cost of Capital of
MA
Equity cost of capital:
0.104
Equity cost of capital is -15.34% below industry mean WACC
Unlevered (without debt) cost of capital:
3.82%
Before-tax cost of debt:
2.96%
After-tax cost of debt:
2.34%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.34%
WACC is -11.14% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.59
Revenue growth rate per share of (3Y):
43.72
Annual revenue growth rate is -79.34% below industry average
EPS:
$9.61
Expected Annual growth rate of EPS (3Y):
3.16%
Expected future EPS growth rate is -87.40% lower than the Credit Services industry
Free cash flow (FCF) per share:
$8.95
Balance sheet equity growth per share: 76.78%
Equity growth rate per share is 222.53% higher than the industry
Debt per share
$14.35
EBITDA per share
$12.50
Valuation Analysis Today of
MA
P/E Ratio:
32.69
P/E Ratio of Competitors/Peers:
15.42
P/E ratio is 112.01% higher than main peers & is 169.34% higher than the industry
Stock price/value with industry average P/E ratio: $116.64
MA is 176.54% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $47.27
Present value of the expected future dividends only: $31.62
P/S (Price to Sales ratio):
15.67
Price to sales ratio is 201.41% above the industry mean
P/B (Price to book value ratio):
43.72
Price to free cash flow: 36.05
Price to free cash flow ratio is 13.60% higher than the industry
Net income growth rate (3Y):
57.18%
Net income growth rate is 253.99% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 5.05%
Dividend yeild: 0.58%
Previous Dividend: $0.49
Previous adjusted dividend: $0.49
Previous Dividend: $1.86
Expected next dividend best case: $0.53
Expected next dividend worst case: $0.45
Average dividend payment (long-term): $0.42
Average dividend increase/decrease (growth rate) % per period: 4.26%
Expected next dividend payment date: 08/08/2022
Expected next dividend record date: 07/07/2022
Expected next dividend declaration date: 05/09/2022
Previous dividend payment date: 05/09/2022
Previous dividend record date: 04/08/2022
Previous dividend declaration date: 02/08/2022
Dividend History:
2022-04-07--$0.49
2021-10-07--$0.44
2021-04-08--$0.44
2022-01-06--$0.49
2021-07-08--$0.44
2021-01-07--$0.44
Dividend growth rate is -144.53% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
197.16%
Net debt to equity ratio:
110.42%
Debt to assets ratio:
37.32%
Net debt to assets ratio:
20.90%
Debt-to-asset ratio is -52.13% below industry average
Ability to repay debt:
Interest coverage ratio:
27.83
Interest coverage ratio is 183.32% more than industry average
Looking forward:
Debt growth rate:
3.45%
Annual debt growth is -93% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.808
Statistical significance of correlation:
MA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 44.06% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.013
Covariance of price movement with the market:
0.018
Kurtosis
7.245
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.434
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MA
Gross Profit Margin Ratio:
308%
Operating Profit Margin Ratio:
54.46%
Operating profit margin is 87.28% higher than the industry
Net Profit Margin Ratio:
308%
Effective Tax Rate:
12.86%
Effective tax rate is -40.63% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
134.92%
Return on equity (ROE) is 218.23% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
25.54%
Return on assets (ROA) is 321.43% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
1.34
Current ratio is -76.85% below industry average
Cash Conversion Cycle (days):
-21.1
Cash conversion cycle is -115.92% below industry average
The remaining useful life of property plant & equipment is: 2.6 years
Stock based compensation to net income ratio:
0.78%
In-depth Efficiency Analysis
Revenue generated per employee:
829.0K
Each employee generates 14% more revenue than industry average revenue per employee
EBITDA generated per employee:
503.3K
Each employee generates 20% more EBITDA than industry average revenue per employee
Profit generated per employee:
395.4K
Each employee generates 63% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
62.0K
Each employee generates 6% more free cash flow than industry average revenue per employee
Assets/Capital per employee
883.8K
Each employee generates 6% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MA
BANK OF AMERICA CORPORATION (XNYS:BAC)
VISA INC. (XNYS:V)
JPMORGAN CHASE & CO. (XNYS:JPM)
MORGAN STANLEY (XNYS:MS)
THE CHARLES SCHWAB CORPORATION (XNYS:SCHW)
ROYAL BANK OF CANADA (XNYS:RY)
THE TORONTO-DOMINION BANK (XNYS:TD)
BLACKROCK, INC. (XNYS:BLK)
AMERICAN EXPRESS COMPANY (XNYS:AXP)
Current Analyst Ratings
Strong buy�58%
Buy�83%
Hold�17%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
19.90B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.57B
15.33B
-
2.61B
3.57B
957.00M
755.00M
4.32B
-
434.00M
755.00M
12.08B
10.84B
9.49B
10.89B
1.40B
9.49B
Statement of Cash Flow
Date:
Period:
192.00M
Differed Income Tax :
- 320000.00K
Stock Based Compensation :
74.00M
Change in Working Capital :
- 1306000.00K
Accounts Receivables:
134.00M
Other Working Capital:
- 6000.00K
Other Non-Cash Items:
511.00M
Net Cash Provided by Operating Activities:
1.78B
Investments in PP&E:
- 146000.00K
Net Acquisitions:
-
Purchases of Investments:
- 119000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
6.88B
449.00M
7.33B
3.99B
-
4.64B
15.95B
1.96B
7.63B
3.68B
1.77B
795.00M
5.39B
21.21B
-
37.16B
666.00M
778.00M
445.00M
-
10.48B
11.93B
13.87B
3.85B
18.11B
-
30.03B
-
47.80B
- 798000.0K
-
March 31, 2022 at 6:00:00 AM
8.89B
7.03B
37.07B
2.22B
14.65B
7.8B
121.00M
- 143000.00K
- 287000.00K
-
-
- 2408000.00K
- 479000.00K
733.00M
- 2154000.00K
- 28000.00K
- 687000.00K
9.22B
9.90B
1.78B
- 294000.00K
1.49B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MA
2023
2024
2025
2026
2027
$335.16
$358.97
$384.48
$411.80
$441.05