Visa (NYSE: V) has proven itself to be a growth engine throughout its life cycle. With a market capitalization of $463 billion and, a 2021 revenue of $24 billion is the world’s largest digital payment service provider.
Ending the latest quarter Q1 of 2022 the net revenue was $7.1 billion with an increase of 24% compared to last year. Other factors that are contributing to the valuation of the firm are growth and stability along with the network effects the company is enjoying.
The more consumers enter the network the more merchants will also look to join enriching the entire system. This creates a virtuous cycle of more consumers and more merchants making the network effects more valuable.
Stock performance and analyst predictions
The stock has had an up and down performance from December 2021 creating a double-bottom, a technical signal indicating a change in trend and momentum reversal from prior leading price action.
Currently, the stock is trading below 20-50-200 day Simple Moving Averages (SMAs) looking to reverse the price action trend by going above the SMAs.
Wall Street analysts give the stock a strong buy rating, seeing the next 12-months average price at $277.13 which is a 29.05% upside from the current trading price of $214.75. The most bullish analysts see the highest price at $312 which is quite a high way up from the current price.
Great total return possible
Since the company has growing earnings and good cash flow it should be assumed that paying dividends without weakening the balance sheet should not be an issue for Visa going forward.
The current dividend stands at 0.7% annually with possible annual growth of 18% which was the average growth rate in the previous five years as stated in the company’s earnings report.
Visa is a household name that should not be overvalued at the current prices it has a strong balance sheet and is profitable. There is a possibility that the stock may become a high-yield dividend investment over time if cash flows keep coming in at the same clip as now.
Finbold has covered dividend stocks worth keeping an eye on which could nicely complement Visa stock. Check the report here.
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