Visa (V) is a relatively low risk way to play the economic recovery. Visa, along with Mastercard, dominates the electronic payments processing industry. Visa has no credit exposure as the card issuers bear that risk. Visa just processes the payment and gets paid a fee. Its business is only affected by the volume of transactions and as we move closer to a cashless society, their business will continue to grow. The volume of debit transactions recently surpassed credit transactions. As the economy exits the recession and consumption rises, Visa should see increased volumes on both the debit and credit side.

Highlights from recent earnings report:

Visa Inc. affirms its financial outlook for the following metrics for 2010:

• Annual net revenue growth at the lower end of the 11% to 15% range, given certain economic recovery assumptions; and
• Annual diluted class A common stock earnings per share growth of greater than 20%.

Visa Inc. updates its financial outlook for the following metrics for 2010:

• Volume and support incentives in the range of 16-17% of gross revenue;
• Advertising, marketing and promotion expenses less than $1 billion;
• Annual operating margin in the mid 50% range;
• GAAP tax rate in the range of 38 to 39%;
• Capital expenditures in the $200-250 million range; and
• Annual free cash flow in excess of $2 billion.

Visa Inc. provides its financial outlook for the following metric for 2011:

• Annual diluted class A common stock earnings per share growth of greater than 20%.

 

Visa reports profit; unveils stock buyback

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Stock Highlight		YTD	1-Yr	S&P	Moving	Point &
		Return	Return	Rating	Averages	Figure
V	Visa Inc.	45.2%	31.1%	3-Stars	5	Buy
					Updated 10/30

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