Mastercard and Visa at 52-Week Lows: Is Now the Time to Buy?
For investors, this could be an opportune time to buy shares of Mastercard. The coronavirus is causing layoffs and people are working reduced shifts. That's going to put a strain on individuals and lead to more credit card spending. While there is a higher risk of default for lenders, with stimulus packages in the works for Americans, the government isn't about to let people get into bankruptcy due to the coronavirus.
And with consumers panic buying and spending excessive amounts on household goods, cleaning supplies, and groceries, there's little reason to believe that when Mastercard reports its earnings in a little over a month, that they'll disappoint.
Rival card-issuer Visa (NYSE:V) is also trading around its 52-week low as well and is also trading around 27 times earnings. Both of these stocks could be attractive buys for investors as consumers have less cash on hand and look to credit to help them during these troubled times.
In 2019, shares of Mastercard soared around 60% while Visa generated returns north of 40%. If we look at a period of 2017 through to 2019, then the delta between their two returns becomes even greater with Mastercard doubling since then and Visa rising by 64%.