In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Mastercard (NYSE:MA) against its key competitors in the Financial Services industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within 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 | 39.48 | 64.28 | 18.32 | 44.44% | $4.32 | $5.35 | 11.04% |
| Visa Inc | 31.12 | 14.76 | 17.02 | 12.62% | $6.45 | $7.13 | 9.57% |
| Fiserv Inc | 34.31 | 4.03 | 5.97 | 3.14% | $2.22 | $3.12 | 7.38% |
| PayPal Holdings Inc | 19.65 | 4.01 | 2.80 | 5.46% | $1.75 | $3.61 | 8.21% |
| Fidelity National Information Services Inc | 90.05 | 2.91 | 5.28 | 1.39% | $0.8 | $0.95 | 2.68% |
| Block Inc | 69.13 | 2.38 | 2 | 1.02% | $0.6 | $2.23 | 11.21% |
| Global Payments Inc | 18.77 | 1.16 | 2.67 | 1.68% | $1.08 | $1.63 | 4.74% |
| Corpay Inc | 25.69 | 8.92 | 6.78 | 8.38% | $0.51 | $0.77 | 2.9% |
| Jack Henry & Associates Inc | 35.59 | 7.37 | 6.13 | 5.58% | $0.18 | $0.23 | 4.73% |
| WEX Inc | 37.48 | 4.99 | 3.50 | 4.32% | $0.25 | $0.41 | 8.4% |
| Shift4 Payments Inc | 58.01 | 9.13 | 2.13 | 5.7% | $0.13 | $0.23 | 29.83% |
| Euronet Worldwide Inc | 17.22 | 3.65 | 1.28 | 6.76% | $0.18 | $0.41 | 5.02% |
| The Western Union Co | 7.27 | 9.14 | 0.99 | 33.62% | $0.24 | $0.4 | -8.85% |
| StoneCo Ltd | 10.54 | 1.26 | 1.62 | 3.29% | $1.13 | $2.25 | 11.86% |
| Paymentus Holdings Inc | 102.46 | 7.34 | 4.82 | 2.1% | $0.02 | $0.06 | 32.55% |
| Payoneer Global Inc | 32.12 | 4.76 | 3.57 | 4.87% | $0.06 | $0.2 | 15.86% |
| PagSeguro Digital Ltd | 8.15 | 1.06 | 1.63 | 3.59% | $1.83 | $-0.02 | 6.74% |
| DLocal Ltd | 19.82 | 5.62 | 3.74 | 10.06% | $0.06 | $0.07 | 6.29% |
| Evertec Inc | 31.70 | 4.40 | 2.79 | 6.44% | $0.09 | $0.11 | 26.88% |
| Average | 36.06 | 5.38 | 4.15 | 6.67% | $0.98 | $1.32 | 10.33% |
Upon closer analysis of Mastercard, the following trends become apparent:
The Price to Earnings ratio of 39.48 for this company is 1.09x above the industry average, indicating a premium valuation associated with the stock.The elevated Price to Book ratio of 64.28 relative to the industry average by 11.95x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 18.32, which is 4.41x the industry average, the stock might be considered overvalued based on sales performance.
With a Return on Equity (ROE) of 44.44% that is 37.77% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.32 Billion, which is 4.41x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $5.35 Billion, which indicates 4.05x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 11.04%, which surpasses the industry average of 10.33%, the company is demonstrating robust sales expansion and gaining market share.
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.
When comparing Mastercard with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
Mastercard demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 2.1, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Mastercard, the PE, PB, and PS ratios are all high compared to its peers in the Financial Services industry, indicating potential overvaluation. On the other hand, Mastercard's high ROE, EBITDA, gross profit, and revenue growth suggest strong operational performance and growth prospects relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
