MasterCard

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Number-two payment network MasterCard ( MA) has made some stellar progress in the last year, rallying more than 60% as investors piled into a growth story for electronic payments.

Put simply, consumers are transitioning en masse from traditional payment options like cash and checks to electronic options like credit and debit cards. In the past few years, as MasterCard captures a chunk of a growing pool of dollar volume, the firm has been enjoying stair-step growth.

Even though MasterCard's presence on around a third of the world's payment cards pales in comparison to the 63% share commanded by Visa (V), the combination of plenty of excess network capacity and major growth initiatives in international markets could help the company slowly close the gap. That's going to change at some point, however. As electronic payments continue to expand in popularity, the disparities between different networks are likely drop off, and the card acceptance arguments being made by payment networks isn't going to work with consumers. Instead, MasterCard needs to continue to make a compelling case to card issuers.

Because MasterCard isn't an issuer itself, the firm is completely devoid of the credit risk that its clients take on. That means that the firm benefits from all of the consumer spending upside but none of the downside from bad lending standards -- an impressive proposition for most investors.

MasterCard doubled its tiny dividend payout on Tuesday, bringing the firm's quarterly dividend to 30 cents per share.

I also featured MasterCard, one of the 10 Best-Performing S&P 500 Stocks of 2011, in " 5 Tech Sector Stocks Funds Love."

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