Visa (NYSE:V) one of the biggest credit services companies in the world has had a strong start to 2015 after dropping down somewhat to $245 a share in late January, it closed yesterday at a price of $269.10, remaining largely steady for the day.
Predicting what will happen with the stock price of Visa (NYSE:V) in the short term is no easy task, But we can give you 4 long term reasons why it is poised to always be a strong player featuring in investor portfolios.
Visa (NYSE:V) operates in an environment that can be described pretty much as a duopoly with Mastercard being their main competitor, other players have far smaller market shares than these two. As such Visa has a tight control on the market with Mastercard.
2. Geographical Diversity
Visa (NYSE:V) is completely global, with customers based in all corners of the earth. While this doesn’t create many growth opportunities in new markets for existing products, it means they are well diversified enough to weather down turns in several markets while being propped up by others they are present in.
3. Cashless Societal Shift
With consumers fast shifting to a cashless society this creates new opportunities for Visa, such a strong player already in the industry to create new revenue streams
4. Growing Wealth of the Developing World
As developing nations continue to prosper and grow this will mean more growth for Visa as consumers in these countries will have the ability to take up new and more credit related products.
Visa (NYSE:V) is priced on a forward PE multiple of approximately 22.5, which is above the market forward PE currently at around 17.6. This seems fair due to the strong position Visa has in the market as well as their opportunities for growth.