MasterCard Inc

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MA : NYSE : Financial
$93.54 up 0.54 | 0.58%
Today's Range: 92.75 - 93.64
Avg. Daily Volume: 4,103,000
07/26/16 - 10:38 AM ET

Financial Analysis


MASTERCARD INC's gross profit margin for the first quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. MASTERCARD INC has average liquidity. Currently, the Quick Ratio is 1.39 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 13.04% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2446.02230.0
EBITDA ($mil)1443.01438.0
EBIT ($mil)1348.01351.0
Net Income ($mil)959.01020.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)6750.06336.0
Total Assets ($mil)15905.014633.0
Total Debt ($mil)3333.01495.0
Equity ($mil)5479.06301.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin58.9964.48
EBITDA Margin58.9964.48
Operating Margin55.1160.58
Sales Turnover0.620.65
Return on Assets23.5525.74
Return on Equity68.3859.78
Debt Q1 FY16 Q1 FY15
Current Ratio1.651.74
Debt/Capital0.380.19
Interest Expense20.017.0
Interest Coverage67.479.47


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)1102.01142.96
Div / share0.190.16
EPS0.860.89
Book value / share4.975.51
Institutional Own % n/a n/a
Avg Daily Volume4138148.04628049.0

Valuation


BUY. MASTERCARD INC's P/E ratio indicates a premium compared to an average of 27.40 for the IT Services industry and a premium compared to the S&P 500 average of 25.05. For additional comparison, its price-to-book ratio of 18.60 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 8.25. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MASTERCARD INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MA 27.85 Peers 27.40   MA 24.72 Peers 20.12

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MA is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MA is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MA 22.41 Peers 21.67   MA 4.56 Peers 2.70

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MA is trading at a premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MA trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MA 18.60 Peers 8.25   MA 2.15 Peers 23.94

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MA is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MA is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MA 10.31 Peers 5.30   MA 4.04 Peers 22.71

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MA is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MA significantly trails its peers on the basis of sales growth

 

 

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