This article will explain to you why you should buy MasterCard stock and we will also take you through the easy process you can follow to buy this wonderful stock.
MasterCard Incorporated has a robust history. From 1966 to 1969 it was known as Interbank and between 1969 to 1979 it was called Master Charge, created by a union of several regional bankcard businesses.
In 2016 it turned into a prominent American Multinational financial service provider with headquarters in the New York. MasterCard Worldwide has been a publicly traded company since 2006 and listed in the NYSE: MA symbol.
The major business of the MasterCard is to process inter-bank payments of traders and other automated card-dispensing financial institutions.
There is evidence that before it its IPO the company was a cooperative business arrangement owned by well over twenty-five thousand financial institutions worldwide doing customization of their credit/debit cards.
Prior to its initial public offering, MasterCard Worldwide was a cooperative owned by the more than 25,000 financial institutions that issue its branded cards.
AN OVERVIEW OF MASTERCARD STOCK
As it stands today, MasterCard is one of a few household names that define the concept of the credit card. It also turned into a great circuit in the field of processing debit card transactions.
The company has made it a mission to give more people access to electronic-based finance. MasterCard is a United States Financial Services Provider Company. Its Stock is traded on the New York Stock Exchange (NYSE) under the MA symbol.
The Company is known for providing the technology necessary for electronic variety of payment.
The MasterCard technology establishes a network of interaction among different business interests such as the producers, consumers, banking systems and government institutions across the globe by linking their payment networks electronically.
Anyone willing to invest in MasterCard stocks will need to go through a brokerage that offers you access to the NYSE which is traded as: MA (class A); S&P 100 component; S&P 500 component.
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IS MASTERCARD STOCK A GOOD BUY? SEE EXPERT ANALYSIS
We can confirm that with a market capitalization of over $372 billion MasterCard stock trades near all-time highs. However, its recent gains owe more to the multiple increase than earnings growth.
The stock will remain attractive based on expected earnings for this year 2022. MasterCard has consistently traded at multiple earnings which is understandable given the powerful growth rate in its earnings per share.
The table below shows how MasterCard stock has fared over the past five years with projections into the next year.
| Year | Earnings Per Stock ($) | Stock Price ($) |
| 2017 | 3.65 | 168.70 |
| 2018 | 5.60 | 211.05 |
| 2019 | 7.94 | 316.50 |
| 2020 | 6.37 | 316.55 |
| 2021 | 7.92 | 375.00 |
| Predicted for 2022 | 10.44 (Estimate) | 385.00 (Estimate) |
A study of the 2021 and 2022 estimates in the above table reveals that the MasterCard stock is valued beyond 2021 unless there is extraordinary event that may alter the analyst’s expectations.
Judging from the historical data on valuation of MasterCard stock, and the fact that it seems profitable to invest on these values through 2022 there is evidence that MasterCard stock is a good buy now.
HOW TO BUY MASTERCARD STOCK
To become a shareholder of the MasterCard, the following steps must be followed:
Step 1: Find an Online Broker that can give you access to the NYSE
Not every broker will give you this access to buy MasterCard stock due to the fact that they may not have access to the NYSE.
Therefore, in looking out for a broker for the MasterCard stock you have to consider three crucial factors such as the broker’s accessibility to the NYSE market, the broker’s service commission, and the credibility of the broker’s trading platform.
Step 2: Set up a Brokerage Account
You need to open an account with an online broker. This account is like a bank account but it is opened online with a reputable brokerage firm.
You may do it in a few minutes. However, it may take hours or days to get this account approved depending on the broker’s protocol for verification.
Step 3: Fund the Brokerage Account
Once your trading account is opened it becomes necessary that you inject some money into it. Make a deposit of money into this account through debit or credit card or other electronic wallets.
This first cash is sent to your broker via this account. Having done this your broker can now see how prepared you are to buy MasterCard stock.
Step 4: Buy the MasterCard Stock
With the account now funded and decision taken about type and volume of stock to buy you are now good to go.
You will log in to your online brokerage platform, search for MasterCard stock, and choose the volume of stock you may wish to buy, and then click the buy-button. This action will initiate the buying of stock subject to confirmation by your broker.
When buying the MasterCard stock, you will be allowed to choose from two types of order: Market Order and Limit Order.
The market order allows you to buy at the prevailing market price of the stock, while the limit order gives you the opportunity to indicate the exact price you may want to buy the stock.
Step 5: Regular Monitoring of your MasterCard Stock Position
Buying of MasterCard stock is not the end of the investment. You must develop a strategy to keep your eyes on the ball.
Your objective is to make profit so you must continue to check the market mechanisms towards your goal.
Monitoring could serve a short or long term purpose. If you are buying the MasterCard stocks for a short term purpose your monitoring will focus of short term dynamics such as price movements. This will help you set the target price at which you may want to sell in order to maximize your profit objective.
However, if your aim of buying MasterCard stock is the long term benefit, then you will very much concentrate on the company’s information as regards annual meeting and volume of shares.
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IS MASTERCARD STOCK UNDERVALUED?
A stock is said to be undervalued when the market price is below the actual price of the stock.
The present MasterCard stock price per unit is averaging $368.34. The market Score for MasterCard stock is 65, which is about 30% above its previous median score of 50.
The statistics infers lower risk than normal range. The stock is now trading in between 65-70 percentile range as compared to its past trajectory on Stock Score levels.
Yes, the MasterCard stock is undervalued to enable a buyer of the stock to be comfortable with the risk of investing.
IS MASTERCARD STOCK PROFITABLE?
The answer is straight Yes.
Recent studies have shown that with the sole exception of the return-on-assets measurement in which MasterCard is ranked second, the company has the highest level of profitability compared to other S&P companies.
MasterCard stock currently trades for $370 per share with an average price target of 22 analysts declaring $418.42.
HOW TO MAKE MONEY IN MASTERCARD STOCK?
There are three good ways to make money from your investment in the MasterCard stock. They are:
- Buy MasterCard stocks for long term target
- Be engaged actively in trading for short term
- Receive dividends from your stock yield
Buy MasterCard stocks for long term target
You buy stocks for long term by buying shares of stocks of MasterCard every month with your monthly savings.
In reality, investing regularly will help you build your MasterCard stocks to grow in volume and with high profit.
Be Engaged Actively in Trading for Short term
Doing active trading in the MasterCard stocks market will be money spinning.
To trade short term is like buying and selling at a short interval due to favorable pricing signals. You will do this by buying some MasterCard stocks and set up your target Profit and loss margins so as to be on a comfortable position.
Receive dividends from your stock yield
Even when you are making money through active trading, the MasterCard Company pays dividend per annum.
The MasterCard can boast of an annual dividend yield of 0.50% which is distributed to its investment.
The MasterCard treats its stockholders with great respect and builds trust in them. Your investment attracts a certain percentage of the company’s aggregate profit after tax which constitute your dividend.
