This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Stocks With Ever-Increasing Dividends

MasterCard

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Credit card issuer MasterCard (MA) really saw its business take off since the middle of the last decade. As it expanded its global reach, revenue shot up from $3.3 billion at the end of 2006 to $6.7 billion at the end of 2011. Still, the divided was stuck at 60 cents a share annually throughout the growth phase. Management thought it wise to preserve most of the cash flow to help fuel that international sales growth.

>>5 Big Trades for a Ping-Pong Market

These days, MasterCard is settling into a more mature phase, as revenue grew around 10% in 2012 (to $7.4 billion) and is expected to rise at a similar pace in 2013 and 2014. Yet even as the top line matures, this is still a remarkable bottom-line story. MasterCard's profit margins are already quite robust and growing higher still, thanks to a largely automated business model when additional incremental revenues flow quickly to the bottom line. Prior to last year, Master Card never earned more than $15 a share in its history before 2010. Now the company is on track to earn $25 a share this year and perhaps $30 a share next year, according to consensus forecasts.

Management has already responded by doubling the dividend to $1.20 a share in 2012 and doubling it again in 2013 to $2.40 a share. Guess what? That dividend is bound to double again, if not in 2014 then soon thereafter. Frankly, Mastercard's profits are now so robust that we may be looking at a $10 a share dividend by the end of the decade, especially as this company's cash is piling up so fast (recently exceeding $5 billion) and it carries no debt. Soon management will have almost no need to retain profits, at which point the dividend could be sharply hiked.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs