Unstoppable Duopoly: The Allure of Visa and Mastercard for Investors

An unstoppable duopoly

Few people think about what happens once they swipe their credit cards in a store. The process is pretty intricate. Visa and Mastercard form the backbone of it.

Strong financial results

Visa and Mastercard have helped drive the move away from cash for years. As credit-card usage increases, both companies benefit from more transactions and higher revenue from fees. It's not surprising, then, that they have delivered excellent financial results in recent years.

Excellent dividend records

During the past decade, Visa and Mastercard have increased their payouts at an incredible pace.

Generating plenty of profits and free cash flow can allow a company to do that. Still, both have plenty of room for dividend hikes given their relatively modest cash payout ratios (both are about 20% of net income).