Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.9%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MASTERCARD INC has improved earnings per share by 16.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASTERCARD INC increased its bottom line by earning $14.83 versus $14.05 in the prior year. This year, the market expects an improvement in earnings ($21.84 versus $14.83).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 15.1% when compared to the same quarter one year prior, going from $608.00 million to $700.00 million.
- The gross profit margin for MASTERCARD INC is rather high; currently it is at 57.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.50% significantly outperformed against the industry average.
- Net operating cash flow has increased to $641.00 million or 19.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.40%.
MasterCard Incorporated, a payments and technology company, together with its subsidiaries, provides transaction processing and other payment-related services in the United States and internationally. The company has a P/E ratio of 27.1, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. MasterCard has a market cap of $54.21 billion and is part of the
industry. Shares are up 21.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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