Mastercard Inc (MA), American Express Company (AXP): Does Visa Inc (V) Deserve to Be in the Dow?

The question, though, is whether Visa will keep its position atop the industry. Plastic is rapidly giving way to Internet- and mobile-based payment transactions as rival companies seek to provide secure and convenient ways to enable mobile devices to function as electronic wallets. In particular, payment systems from eBay Inc (NASDAQ:EBAY)‘s PayPal, which were initially designed to help facilitate auction- and marketplace-based purchase transactions for eBay customers, have been a high-growth profit center for eBay Inc (NASDAQ:EBAY). As PayPal has become more readily available as a brick-and-mortar payment option, the traditional lines between online and in-person transactions have started to blur.

Will Visa earn its place in the Dow?
Despite the competitive challenges, Visa has huge potential for growth, and investors expect the company to live up to its promise. With its huge share price giving it so much influence in the Dow, though, downside risk for Visa will have a potentially large impact on the average’s overall results if the company fails to stay ahead of its rivals in the payment-processing space. Still, if Visa can deliver on analyst expectations for earnings growth of almost 20% over the next several years, then it will have gone a long way toward demonstrating that it deserves its place within the Dow.

The article Does Visa Deserve to Be in the Dow? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends American Express, eBay, MasterCard, and Visa. The Motley Fool owns shares of eBay, MasterCard, and Visa.

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