NEW YORK (TheStreet) -- MasterCard  (MA) - Get Report, the world's second-largest credit/debit card company, will report second-quarter earnings Wednesday before the opening bell. Right away, I can tell you MasterCard shares, which have gained 10% on the year and trade at a price-to-earnings ratio of 29, aren't cheap. That P/E is eight points above the S&P 500 (SPX) index, which is up less than 1% on the year.

That said, expensive doesn't always equate to a bad value. Consumers are saving more money, thanks to -- among other things -- lower gas prices and an improving labor/wage market, which will likely drive more spending in the near term. This increased spending should fuel more transactions for MasterCard. And the more transactions it processes, the more money it makes.

The New York-based company is already benefiting from gross dollar volumes that are climbing at low double-digit rates. This is important because MasterCard charges its service fees based on the gross dollar volume of transactions its processes for its customers/retailers. The higher the volume, the more money MasterCard make on transaction fees.

At the same time, this means MasterCard can still make money even if transaction volumes decrease, since the higher gross dollar amounts can offsetting falling transaction numbers. Better still, as a multinational company that is exposed to impacts of the strong U.S. dollar that devalues overseas sales, MasterCard should be able to withstand some of this pressure.

For the quarter that ended June, the average analyst earnings estimate calls for 86 cents a share on revenue of $2.42 billion, translating to increases of 7.5% and 2%, respectively. For the full year, ending in December, earnings are projected to climb 11% to $3.44 a share, while revenue of $9.82 billion calls for a 3.7% climb.

It's certainly good news that MasterCard is growing earnings at twice the rate of revenue, underscoring its focus on profitability. These factors, as well as the company's plan to buyback some $7 billion worth of its own stock, explains why the shares have a consensus buy rating and an average analyst 12-month price target of $104.50, 8% higher than current levels of around $97.

Assuming the stock reaches its high target of $120, buyers today would reap 25% gains. In other words, for investors interested in MasterCard shares, now is a good time to buy, while collecting the 16-cent quarterly dividend that pays 0.66% annually.

This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.