MasterCard (MA) and Visa (V) are capping off a great year with a solid holiday selling season. Indeed, both MA stock and V stock are clobbering the broader market this year. But with consumer spending forecast to grow only moderately next year, are MasterCard stock and Visa stock still buys in 2014?
MA stock and V stock have been terrific holdings since the stock market bottom of 2009, although MA stock definitely has the edge. MA stock is up 463% since 2009, while V stock gained 302%. By comparison, the S&P 500 is up 109% over the same time frame.
MasterCard and Visa are the largest payments processing companies in the world, and they’re benefitting handsomely from the ongoing transition to electronic payments from cash and checks. However, while it may not be too obvious from MA stock and V stock price performance, both MasterCard and Visa are sensitive to consumer spending in the both the U.S. and abroad.
Then, of course, there’s the ever-present threat of hackers. The recent attack on Target (TGT) — where 40 million accounts were compromised — might not hurt MasterCard or Visa directly, but it sure doesn’t build confidence in electronic payments. That’s not good for MA stock or V stock in the longer run.
Regardless, after an outstanding 2013, MA stock and V stock look set for more outperformance next year. But if you had to pick just one, would MasterCard or Visa be the better bet? Here’s a quick look at MasterCard stock and Visa stock to help decide: