Time to Capitalize on QE3: Visa Inc (V), Mastercard Inc (MA)

MasterCard Inc (NYSE:MA) also reported blockbuster earnings. Its quarterly revenue surged by 9.7%, and its profits surged by 18% (excluding the onetime litigation charges of $495 million) which were better than expected. The results beat the estimates. Moreover, the board of MasterCard has approved a $2 billion share repurchase program, and doubled its quarterly cash dividends.

My Foolish Conclusion

In my opinion, MasterCard and Visa are as good as an investment can get. Not only did their results crush the Street’s estimates, but their respective boards are doing everything to return value to their investors. A buyback plan when the company is doing well, only displays the amount of faith and confidence of the board in the company’s future. In my opinion the liquidity injections give investors a chance to lock in greater returns with less risk. Naturally, credit services companies, Visa and MasterCard have a better reward-to-risk ratio than their indirect peers and I think both Visa and MasterCard are worth a Buy Rating. But that doesn’t call for shorts on Discover Financial or American Express.

The article Time to Capitalize on QE3 originally appeared on Fool.com and is written by Piyush Arora.

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