MasterCard Inc

Find Ratings Reports
MA : NYSE : Financial
$101.66 | %
Today's Range: 101.25 - 102.10
Avg. Daily Volume: 4,099,200
09/23/16 - 4:02 PM ET

Financial Analysis


MASTERCARD INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. MASTERCARD INC has average liquidity. Currently, the Quick Ratio is 1.42 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 8.85% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)2694.02390.0
EBITDA ($mil)1580.01404.0
EBIT ($mil)1487.01312.0
Net Income ($mil)983.0921.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)6989.05618.0
Total Assets ($mil)16282.015272.0
Total Debt ($mil)3306.01495.0
Equity ($mil)5837.06404.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin58.6558.74
EBITDA Margin58.6458.74
Operating Margin55.254.9
Sales Turnover0.630.62
Return on Assets23.3924.6
Return on Equity65.2558.66
Debt Q2 FY16 Q2 FY15
Current Ratio1.71.58
Debt/Capital0.360.19
Interest Expense22.017.0
Interest Coverage67.5977.18


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1098.01134.02
Div / share0.190.16
EPS0.890.81
Book value / share5.325.65
Institutional Own % n/a n/a
Avg Daily Volume4156290.03576240.0

Valuation


BUY. MASTERCARD INC's P/E ratio indicates a premium compared to an average of 27.47 for the IT Services industry and a premium compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 19.21 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 8.10. 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 30.04 Peers 27.47   MA 25.67 Peers 20.56

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 24.34 Peers 21.95   MA 3.66 Peers 2.41

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 significant 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 19.21 Peers 8.10   MA 4.29 Peers 21.96

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 11.01 Peers 5.57   MA 6.99 Peers 22.90

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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