Shares of traditional digital payment network operator Mastercard have mounted a comeback since plunging in the early days of the coronavirus pandemic. Although its revenue and net income have fallen off because of the disruption in consumer spending, the stock is up 11% year to date at Monday afternoon’s prices.
Further, Mastercard has more good days ahead of it. Investors shouldn’t expect it to be a millionaire-maker stock all on its own since it’s such a large enterprise already, but the company is a good place to start if you’re looking to invest in the premise of a gradual rebuilding of the global economy once the threat of COVID-19 recedes. It’s also a solid way to profit from the general migration away from cash.
A disconnect between share price and financial reality?
Mastercard’s stock gains this year may seem baffling. After all, a less-than-ideal spring quarter (in which revenue and adjusted net income fell 19% and 29%, respectively, from a year prior) was followed by a similarly rough summer. In Q3, revenue fell 14% year over year, and adjusted net income slumped by 27%. With nine months of 2020 now in the books, it goes without saying that this will be a year the payment network company will want to forget.
