Shares of the global payment giant Mastercard (NYSE: MA) have reached an all-time high, coinciding with a period when the company is preparing for significant changes in its business. Notably, the recent impressive returns have mirrored the company’s consistent performance since going public, solidifying its reputation as a profitable investment.
In this context, a trader using the pseudonym Gurgavin in an X (formerly Twitter) post on August 28 pointed out that the credit card giant’s shares have outperformed the broader market, delivering remarkable annual returns of over 30% since its initial public offering (IPO). This starkly contrasts the less than 10% yearly returns observed for the general stock market.
Since Mastercard went public, the company’s stock has returned an eye-popping 11,237%, propelling it into an elite league of high-performing stocks. In comparison, the S&P 500 index, a benchmark for the broader market, has yielded a more modest 397% return over the same period.
In the same breadth, chief market strategist Charlie Bilello, in another X post on August 30, also highlighted Mastercard’s impressive performance amid the new all-time high. Over the past decade, he observed that Mastercard’s stock price has surged by an impressive 622% during this period, dwarfing the S&P 500’s gain of 230%.
Drivers of MA performance
The strategist referenced Mastercard’s stand on the recent performance that centers around the company’s innovative approach to the payments landscape and its ability to capitalize on changing consumer behaviors and trends.
“Their Q2 earnings report noted “resilient consumer spending, particularly in travel and experiences.” Revenues/Net Income hit new highs in Q2, up 14%/25% over the prior year,” he said.
Significantly, the company delivered a robust second-quarter performance, witnessing a 14.5% surge in revenue to $6.3 billion, surpassing estimates of $6.18 billion. Several factors contributed to these impressive results, including introducing new payment networks and sustained expansion in the travel sector.
Meanwhile, the company’s stock is encountering various obstacles, such as the volatile global economy and regulatory challenges arising from antitrust concerns. Despite this, Mastercard has multiple strategic initiatives likely to drive growth, including plans to broaden its influence through projects like the Mastercard Multi-Token Network (MTN).