Best Investment Visa or Mastercard? - Should You Invest Now?

Dividend Guy
25 Jul 202421:00

Summary

TLDRThe video script discusses Visa's recent earnings report, which, despite showing a 10% revenue increase and a 12% rise in adjusted earnings, was deemed disappointing due to a 4% stock price drop. It compares Visa and MasterCard's business models, growth vectors, and potential risks, highlighting their duopoly in the credit card industry. The script also explores the companies' financial metrics, dividend growth, and valuation, concluding that while MasterCard shows slightly better financial performance, Visa offers better value. The analysis suggests considering both companies for investment but advises not to count them as separate positions in a portfolio.

Takeaways

  • ๐Ÿ“‰ Visa's stock price dropped by almost 4% on the day of their earnings report, despite a 10% increase in revenue and a 12% increase in adjusted earnings.
  • ๐Ÿค” The presenter questions the market's reaction to Visa's earnings, suggesting that the disappointment might not align with the reported growth figures.
  • ๐Ÿ’ก The business model of Visa and MasterCard is based on being payment processors, with revenue generated from merchant fees rather than carrying consumer debt.
  • ๐ŸŒ Both Visa and MasterCard are considered to have a strong position in the market due to their global recognition and widespread acceptance by merchants.
  • ๐Ÿ“ˆ Key growth drivers for Visa and MasterCard include the shift from cash to electronic payments, increased consumer spending, and currency conversion fees during travel.
  • ๐Ÿ›‘ A potential risk for these companies is the ongoing antitrust investigations and merchant dissatisfaction with the high fees charged for transactions.
  • ๐Ÿ“Š The script suggests using a tool like DSR to compare stocks and analyze various metrics such as revenue growth, earnings growth, and dividend growth.
  • ๐Ÿ† MasterCard showed slightly better performance in terms of revenue, earnings, and dividend growth over the past five years compared to Visa.
  • ๐Ÿ’ฐ Visa has a larger market capitalization and processes more transactions, positioning it as a market leader ahead of MasterCard.
  • ๐Ÿ“ˆ MasterCard has a higher PE ratio and forward PE ratio, indicating that investors might be paying a steeper price for its shares compared to Visa.
  • ๐Ÿ’ผ The presenter concludes that both Visa and MasterCard have strong business models and could be suitable for an investor's portfolio, with a slight preference for MasterCard based on the financial metrics presented.

Q & A

  • Why were Visa's reported earnings considered disappointing despite showing growth?

    -Visa's reported earnings were considered disappointing because the stock price dropped by almost 4% on the earnings day, indicating that the market's expectations were not met despite the revenue increase of 10% and adjusted earnings increase of 12%.

  • What is the primary business model of Visa and MasterCard?

    -Visa and MasterCard primarily operate as payment processors. They facilitate transactions between consumers and merchants, charging fees to merchants and not carrying consumer debt, which makes their business model quite robust and less risky.

  • How do Visa and MasterCard benefit from the shift from cash to electronic payments?

    -Visa and MasterCard benefit from the shift to electronic payments as more transactions mean more fees collected from merchants. This trend also includes currency conversion fees when consumers travel, further increasing their revenue.

  • What are the growth vectors for Visa and MasterCard?

    -The main growth vectors for Visa and MasterCard are the global shift from cash to electronic payments, increased consumer spending, and travel which leads to more transactions and currency conversion fees.

  • What is the potential downside of Visa and MasterCard's business model?

    -A potential downside is the reliance on merchant fees, which can be subject to regulatory changes and antitrust investigations. Merchants may also push back against high fees, which could slow growth.

  • How does the script differentiate between Visa and MasterCard in terms of financial performance?

    -The script uses the DSR stock comparison tool to analyze various financial metrics such as revenue growth, earnings growth, and dividend growth, showing slight advantages for MasterCard in terms of revenue and earnings growth over the past five years.

  • What valuation metrics are used to compare Visa and MasterCard?

    -Valuation metrics such as market capitalization, PE ratio, and forward PE ratio are used to compare the companies. The script suggests that Visa might be a slightly better deal in terms of valuation compared to MasterCard.

  • Why might an investor consider both Visa and MasterCard in their portfolio?

    -An investor might consider both Visa and MasterCard in their portfolio due to their similar yet slightly differentiated performance metrics, robust business models, and the potential to benefit from the same growth vectors in the payments industry.

  • What is the significance of the dividend triangle in the analysis of Visa and MasterCard?

    -The dividend triangle, which includes revenue growth, earnings growth, and dividend growth, is significant as it provides a holistic view of the company's financial health and growth potential over time.

  • How does the script address the comparison with American Express and Discovery?

    -The script briefly compares Visa and MasterCard with American Express and Discovery, noting that the latter two carry consumer debt which introduces additional risk factors. It also points out that their dividend growth and overall financial performance have been less robust compared to Visa and MasterCard.

  • What is the final recommendation given in the script regarding the choice between Visa and MasterCard?

    -The script concludes that both Visa and MasterCard are strong companies and could coexist in an investor's portfolio. If choosing one, an investor might consider MasterCard for slightly better financial performance or Visa for its market leadership and slightly cheaper valuation.

Outlines

00:00

๐Ÿ“‰ Disappointment in Visa's Earnings Report

The script begins with a discussion on Visa's recent earnings report, which was disappointing despite a 10% increase in revenue and a 12% rise in adjusted earnings. Key drivers showed growth in the single to double digits, yet the stock price dropped by nearly 4%. The video will compare Visa and MasterCard, analyzing their business models, growth potentials, and risks. It will also explore the use of the DSR stock comparison tool to determine which credit card company might be a better investment, considering American Express and Discovery as well.

05:01

๐Ÿ” Analyzing the Business Models of Visa and MasterCard

This paragraph delves into the business models of Visa and MasterCard, highlighting their roles as payment processors. The companies are categorized as part of the financial sector, technology sector due to their focus on trust, security, and efficient money transfer, and consumer discretionary due to their reliance on consumer spending and travel. The script emphasizes their revenue model, which is based on charging merchants a fee for transactions, and discusses the growth vectors for these companies, including the global shift from cash to electronic payments and the additional fees from currency conversion during travel.

10:04

๐Ÿ“ˆ Growth Vectors and Risks for Visa and MasterCard

The script outlines the growth vectors for Visa and MasterCard, including the global trend of reduced cash usage and increased electronic transactions, especially during travel. It also discusses the potential risks, such as the antitrust investigations and merchant dissatisfaction with the high fees charged by these companies. The script mentions Amazon's attempt to ban Visa transactions in the UK as an example of merchant pushback. Additionally, it touches on the reliance of these companies on a healthy economy for growth, as economic downturns can lead to reduced consumer spending and transaction volumes.

15:05

๐Ÿ“Š Comparing Visa and MasterCard Using DSR Stock Comparison Tool

The script introduces the DSR stock comparison tool, which will be used to compare Visa, MasterCard, American Express, and Discovery. It provides an overview of the financial metrics for Visa and MasterCard, including revenue growth, earnings growth, and dividend growth over the past five years. The tool reveals that both companies have strong beta scores, indicating stability, and high dividend safety scores. The paragraph also discusses the slight differences in revenue and earnings growth rates between Visa and MasterCard, with MasterCard showing a modest advantage.

20:07

๐Ÿค” Evaluating the Market Position and Financial Performance

This paragraph discusses the market position of Visa and MasterCard, with Visa being the leader in payment transactions and MasterCard having a slightly higher PE ratio, indicating a steeper price for investors. The script also compares the dividend growth rates and valuation metrics, suggesting that Visa might be a slightly better deal in terms of valuation. It also touches on the debt structure of these companies, noting that they do not carry consumer debt, which is a positive factor during economic recessions.

๐Ÿ† The Final Verdict on Visa vs. MasterCard

The script concludes by weighing the financial performance metrics and valuation of Visa and MasterCard. While MasterCard shows slightly better financial performance, Visa is considered a better value and market leader. The script suggests that both companies could be part of an investor's portfolio, but if choosing one, an investor might consider current performance metrics or valuation. It also mentions the historical performance of both companies, noting that MasterCard has had slightly better returns over the past five and ten years. The script invites viewers to share their preferences in the comments and encourages continued investment.

Mindmap

Keywords

๐Ÿ’กVisa

Visa is a global payment technology company that facilitates electronic funds transfers. In the context of the video, Visa is discussed as a company with a robust business model, primarily due to its role as a payment processor. The script mentions Visa's disappointing earnings report, where revenue was up 10% and adjusted earnings were up 12%, yet the stock price dropped, indicating market dissatisfaction. Visa's business model is highlighted as one that benefits from consumer spending and travel, charging fees to merchants for transactions.

๐Ÿ’กMasterCard

MasterCard, similar to Visa, is a global payment solutions company that operates as a payment processor. The video script compares MasterCard with Visa, discussing their similar business models and growth vectors. The analysis in the script suggests that MasterCard might be a better investment in terms of certain financial metrics, such as revenue growth and dividend growth, although both companies are considered strong contenders in the credit card industry.

๐Ÿ’กBusiness Model

The business model in the video refers to the way a company creates, delivers, and captures value. For Visa and MasterCard, their business model is described as payment processors, charging fees to merchants for transactions. This model is considered attractive because it generates recurring revenue and is not burdened by consumer debt, as the banks handle that aspect. The script emphasizes the importance of understanding a company's business model for successful investing.

๐Ÿ’กRevenue Growth

Revenue growth is a key financial metric that measures the increase in a company's revenue over time. In the video, revenue growth is used to compare the performance of Visa and MasterCard. The script notes that MasterCard has a slight advantage in terms of revenue growth over the past five years, which is an important factor in evaluating a company's financial health and potential for future earnings.

๐Ÿ’กEarnings

Earnings in the context of the video refer to a company's profits, which are critical for assessing its financial performance. The script discusses the earnings growth of Visa and MasterCard, indicating that both companies have seen double-digit growth in their earnings. This growth is a positive sign for investors as it suggests the companies are effectively managing their operations and increasing profitability.

๐Ÿ’กDividend Growth

Dividend growth is the increase in the dividends paid out by a company over time. The video script highlights the dividend growth rates of Visa and MasterCard, with MasterCard showing a slightly higher rate. This is significant for investors seeking income from their investments, as a higher dividend growth rate can indicate a company's commitment to returning value to shareholders.

๐Ÿ’กMerchant Fees

Merchant fees are the charges that payment processors like Visa and MasterCard levy on merchants for processing transactions. The script discusses the potential downside of these fees, as merchants may be unhappy with the costs and could face legal challenges due to antitrust laws. The fees are a significant source of revenue for these companies but also present a risk if merchants push back.

๐Ÿ’กConsumer Discretionary

Consumer discretionary refers to goods and services that consumers can choose to spend on, as opposed to necessities. In the video, Visa and MasterCard are partly categorized under this sector because their revenue is influenced by consumer spending habits. The script suggests that as the economy grows and consumers spend more, the use of credit cards increases, benefiting these payment processors.

๐Ÿ’กDuopoly

A duopoly refers to a market structure where two companies dominate the industry. The video script describes Visa and MasterCard as operating in a duopoly in the credit card payment processing market. This dominance can be advantageous as it provides them with significant market power and control over pricing, such as the merchant fees they charge.

๐Ÿ’กDividend Stocks Rock

Dividend Stocks Rock is mentioned in the script as a membership website where investors can access tools and resources for stock analysis, including the DSR stock comparison tool. The script uses this platform to compare Visa and MasterCard, demonstrating its utility for investors interested in dividend growth and financial metrics.

๐Ÿ’กDebt

In the context of the video, debt refers to the financial obligation that consumers have when they use credit cards. The script clarifies that Visa and MasterCard do not carry consumer debt on their balance sheets; instead, they partner with banks that handle the debt. This is a key advantage for these companies as it reduces their financial risk.

Highlights

Visa reported disappointing earnings with a 10% revenue increase and 12% adjusted earnings increase, leading to a nearly 4% stock price drop.

MasterCard's earnings are upcoming, raising the question of whether to invest in Visa, MasterCard, or another company.

Visa and MasterCard have identical business models as payment processors, straddling the financial, technology, and consumer discretionary sectors.

They make money by charging merchants fees for transactions, not by carrying consumer debt.

The growth of Visa and MasterCard is driven by the shift from cash to electronic payments, increased consumer spending, and travel.

Merchants are often forced to accept Visa and MasterCard due to their widespread use and recognition.

Visa and MasterCard's business model is considered excellent due to its predictability and recurring revenue from transaction fees.

The potential downside for these companies includes regulatory risks from antitrust laws and merchant dissatisfaction with fees.

Economic downturns can affect consumer spending, leading to fewer transactions and lower revenue for Visa and MasterCard.

MasterCard has shown slightly better revenue and earnings growth over the past five years compared to Visa.

Visa and MasterCard both have high Dividend Safety Scores and strong dividend growth, with MasterCard having a slight edge.

The dividend growth rate for MasterCard is nearly 18% over the past five years, while Visa's is about 17.7%.

MasterCard's stock has shown a nearly perfect dividend triangle over the past ten years, indicating stability and growth.

Visa is the market leader in payment transactions, processing more transactions than MasterCard.

MasterCard has a higher PE ratio and forward PE ratio, indicating a steeper price to pay for its shares compared to Visa.

Both Visa and MasterCard have high market caps, reflecting their significant positions in the payment processing industry.

American Express and Discovery Financial have different business models, carrying consumer debt and showing less stability in their dividend growth.

The presenter suggests that both Visa and MasterCard could be part of an investor's portfolio, but not as a single position.

MasterCard has historically outperformed Visa in terms of financial metrics and dividend growth, making it a compelling choice.

Transcripts

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So Yesterday Visa reported disappointing

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numbers actually so disappointing that

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Revenue were up 10% adjusted earnings

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was up 12% and all the key drivers were

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either up I single digit to double digit

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that is quite disappointing right and

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then you're going to say about Mike that

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doesn't make any sense you just told me

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that it was disappointing well stock

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price dropped by almost 4% on earnings

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day and next week we're going to have

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MasterCard reporting their earnings and

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then the big question is should you buy

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Visa should you buy Mastercard or is

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there any difference between both so

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today we're going to take a look at

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their business model their growth

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vectors their downside potential and

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after that we are going to go into DSR

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to use the stock comparison tool and see

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which of those two companies or maybe

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another one like American Express or

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Discovery should be a better buy in the

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credit card universe so when analyze a

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stock I like to start by understanding

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their business model and if you're not

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able to explain the business model to a

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12-year-old well then you have a pretty

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solid sign that you are missing

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something and you may make a big mistake

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investing in this company so for visa

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and MasterCard they have exactly the

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same business model they are payment

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processors so some people will say oh

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they're in the financial sector because

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they're endling money but we could also

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argue that they are in the technology

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sector because it's all about trust

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security and transferring money

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efficiently processing millions of

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transaction all the time on one place to

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another so they are also a technology

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company and finally they could also be

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categorized as a consumer discretionary

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company because if the economy goes up

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consumers spend money and if they spend

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money they travel of course they're

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going to use their credit card C and

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this is how they make money they make

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money on the fee they charge to the

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merchant which is amazing business so a

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lot of people think oh visa and

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MasterCard has a big risk because they

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carry on Consumer Debt well they don't

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they partner up with banks and the banks

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will have the debt on their balance

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sheet while visa and MasterCard they're

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simply like a toll road they're charging

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whenever there's a transaction but they

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are not responsible on the debt so if

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the consumer is not paying at the end of

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the month they don't care they made

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their money by charging the merchant

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that's it that's all so recurring money

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it benefit from a huge mode because

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everybody wants to use their credit card

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to use their points now and then

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Merchant has pretty much no other

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choices but to offer both I remember

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when I was young it was kind of

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complicated to sometimes have a a

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merchant that will accept Visa

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Mastercard and American Express today

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they're all pretty much forced to accept

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all of those and it's relatively easy

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especially for visa and for MasterCard

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to get approved by Merchant because they

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are known worldwide they are being used

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everywhere and I just came back from a

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trip in Iceland and at no time I needed

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cash I only use my credit card which is

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probably one of the most important

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growth vectors for both companies once

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again because they have like the same

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business model they will grow because

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people use less and less cash and they

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want to transfer money electronically

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with their card with their phone when

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you're paying with your phone you're

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actually paying with the credit card

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that you have included in your phone so

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it's always about the same system where

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the charging fees and it's super easy to

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predict that cash flow coming forward so

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while the market was quite disappointed

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by double digit growth we can see that

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consumers are spending more they're

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traveling more and when they're

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traveling it's also generating even more

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money from visa and MasterCard why

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because then they change for currency

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conversion so their most growth their

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biggest growth vectors are people going

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from cash to electronic or plastic

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payment the fact that we consume more we

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travel more and also that there are

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those fees being charged on every single

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transaction speaking of fees while this

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makes them like one of the perfect

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business model as they work in a duopoly

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because all the other credit cards will

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carry on to death for their customers

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but we're going to talk about that later

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on today um what is what is maybe the

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biggest risk is also all the fees they

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charge to Merchant um recently they were

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almost about to close an Intrust uh

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investigation while they were offering

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some like to lower the fees and so on

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but the doj's were just like yeah no

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that's going to cut it so we're going to

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keep on investigating and we're going to

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stick working on that so Merchants are

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tired for the fees there are antitrust

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laws that are going after also the fact

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that they are duopoly and all Merchant

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are pretty much stuck with them even

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Amazon tried a few years ago to ban Visa

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transaction in the UK that kind of last

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like maybe like a week or 10 days and

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then they went back on the negotiation

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table so we can see that there is a

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Feeling of merchant being upset about

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those fees but it is very hard to get

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outside of that so that would be a

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Slowdown on their growth going forward

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um of course they are depending on the

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economy so whenever the consumer sees

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their budget tightening they will travel

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less they will buy stuff they will be

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buy less stuff and therefore less volume

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less transaction and that will lead to

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lower Vol lower revenue and lower

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earnings but in the end those are like

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pretty small downsides so when I look at

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both visa and MasterCard they show an

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amazing business model well protected by

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the duopoly by the network effect and

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the fact that it is a scaling business

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so they benefit from the economy's scale

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and tomorrow morning if I try to start a

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transactional business well it will be

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very hard for me to benefit from the

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recognition of the brand so Merchant

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will not likely want to approve my

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credit card so imagine like the DSR

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credit card that would be cool right but

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probably not going to happen I don't

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have the mean I don't have the

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technology and I don't have the brand

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recognition so solid moti business so is

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there a difference between visa and

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MasterCard well to answer that question

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from the qualitative analysis that I

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just made there's not much different so

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now we're going to look into the numbers

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to see if we can pick up a clear winner

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and to do that we're going to use DS R

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stock comparison tool so here we are on

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my membership website dividend stocks

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rock where all DSR Pro members have

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access to one of the most powerful tool

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to compare more than one stock together

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it is the stock Unison tool right here

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so the stock on Prison tool is quite

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easy to use you can load a pre-selection

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but today we're going to go directly to

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look at

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MasterCard and we're also going to add

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visa to demand next to see if we can

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find a business that has better numbers

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um so for the overview while both are in

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the financial sector both are in the

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credit services as I told you before I

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would qualif qu classify both companies

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as oneir Financial onethird technology

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and onethird uh consumer discretionary

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because it really depends on how much

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consumers want to spend with their card

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um the beta is pretty similar so this

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one is slightly more volatile than visa

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for MasterCard but not more not not

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enough to make a difference in terms of

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pro rating and dividend safety score

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they have the maximum at DSR both of

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them are amazing and we're going to see

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why when you look at the dividend

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triangle right here we have Revenue

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growth over the past five years so this

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is a annualized growth rate of almost

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11% for MasterCard almost 10% for Visa

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so slight Advantage for MasterCard here

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for the earnings we have a

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similar uh Advantage again so 16% for

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Master Card over the past 5 years

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13.38 for Visa so again pretty solid

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business growing double digit their

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revenue and also double digit their

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earnings and the fact that earnings are

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growing a little bit faster than Revenue

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tells us that there are there is room

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for margin expansion which is kind of

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great because this is what we like as an

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investor we want a business that is able

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to grow their sales grow their profit

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but also show that they are endson on

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their margin and this will obviously

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reflect to the third metric of the

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dividend triangle so the dividend growth

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almost 18% over the past 5 years for

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MasterCard and almost 177% for Visa so

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at this point I would say both

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businesses have a almost copy based

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business model so same risk same growth

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vectors the numbers of the dividend

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triangle is slightly better for

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MasterCard so if I stop my analysis

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right now I would be tempted to put my

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$2 on MasterCard but let's dig further

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to see if there's any other points of

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comparison that could be interesting uh

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one thing that I really like to do is to

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look at the overall trend because it's

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one thing to have the numbers but it's

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even better if you can look at the trend

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that will tell you a little bit more

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about what's going on so we're going to

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take a quick look at their stock cards

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right away so now we are on MasterCard

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what I want to see here is how the

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dividend triangle is moving so as you

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can see here we have Revenue that are

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quite stable and we see that there's a

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bit of a Down of course during the

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pandemic that is also followed by the

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same down the same slowdown for the

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earnings again due to the same event but

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that didn't impact their dividend growth

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rate at all so overall uh we are looking

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here at a nearly perfect dividend

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triangle over the past not 5 years but

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rather 10 years which is quite

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impressive so let's take a look at Visa

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just to see if there is a difference

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between MasterCard and Visa at this

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point so going back again for the

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dividend triangle we have the same dip

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in 20 2020 to 2021 for the revenue and

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the earnings but for the rest of it

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again we do have a pretty straight line

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um a little bit shaky you're here for

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the earnings back in 2017 20 uh 2016

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maybe it would be worth it to go back in

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time to look at what happened but over

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the past five years it's pretty shooting

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towards the right direction for both

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businesses so going back to the stock

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comparison so we're done with the

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overview we're done with the dividend

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triangle and we have a slight winner so

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far for MasterCard um in terms of

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dividend metrics uh the Yi is pretty

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similar slightly advantage on Visa but

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again it's not necessarily moving the

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needle in my opinion same thing for the

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payout ratio so we have a cash payout

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ratio of 20% for MasterCard 22 for visa

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and then we have 21 for the cash payout

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ratio and then 20 for Visa so again

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pretty much head-to-head in terms of

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metrics we can see also the dividend

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growth rate uh over the past one three

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and five years similar so we see that

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over the past 3 years it's a little bit

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better for Visa but for the past 5 years

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it's better for MasterCard so again very

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hard to find a winner here for the

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Childer score which is the uh dividend

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grow rate for the past five years plus

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the dividend yield we are also having a

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better performance for MasterCard again

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18.5 versus

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17.7 so pretty close but just a little

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bit for MasterCard once again and full

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disclaimer it's kind of funny to do this

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comparison chart because I hold shares

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of visa and I do not hold shares of

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MasterCard so maybe I should start

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thinking about making the change right

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well one last step before we go to the

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conclusion before we take a look at

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American Express and Discovery just to

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end up this video on a nice note uh I

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just wanted to look at the valuation

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metrics so valuation metrics in terms of

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market cap we do have a winner here

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where Visa is the leader in terms of

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market capitalization but it also uh has

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more Merchant process more transaction

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so they are the leader in payment

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transaction and Visa is the second one

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in place uh not a bad position as you

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can see it shows better metrics maybe

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that explains why it's able to grow a

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little bit faster so being the

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Challenger sometimes will push the

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business to be a little bit more

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Innovative while Visa can just come

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laidback and uh just keep that edge over

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time and in terms of payout R in terms

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of PE ratio what we have here well as

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MasterCard as outperformed visa for the

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dividend triangle it also reflects that

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you have to pay a steeper price so the

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PE Ratio is higher the forward p ratio

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is higher and when you compare it to the

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average of the past five years um we do

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see that everything is a little bit

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higher for MasterCard so in terms of

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evaluation I would say that probably

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that Visa is slightly a better deal than

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MasterCard um so on the metric side we

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do have a better financial performance

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on V for MasterCard on the valuation

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slightly better performance for Visa but

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overall there's not a huge deal here

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both companies trade at a high p ratio

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but compared to their average they're

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still offering some an interesting entry

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point at this point where on average

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over the past 5 years the market was

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willing to pay almost 42 times the

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earnings right now paying 30 five times

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with a p forward p ratio under 30 and

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same story here where the average at 36

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the current p ratio is at 33 and the

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forward per ratio is at around 25 so

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once again the market is being a little

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bit less right now for the earnings than

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it was in the past so now moving on to

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the debt structure well of course as I

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told you before both companies do not

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carry the consumer's debt on their

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balance sheet so it's not a a risk and

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it's a pretty good thing because when we

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have a recession they will not have to

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deal with collection with their

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customers in terms of debt to equity

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ratio we see that MasterCard has more

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debt and Equity than Visa but it's more

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about how they structured the business

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it's not necessarily a bad thing it's

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just to understand that MasterCard is

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using a little bit more debt than using

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shares to finance their activities while

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it's the opposite for Visa um in terms

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of the current PE ratio the credit score

play15:28

were slightly better on Visa side so

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once again we have like slight Advantage

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but so far it's really really hard to

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create a winner in the side of a winner

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so before I get to that winner because I

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do have one in mind I'm just want to go

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back here and look at the financial

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metrics especially the dividend triangle

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by looking at American

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Express so you can see that we have a

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lot of companies right here so we're

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going to add American Express and we're

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going to add discovery which is really

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important for those two they do have the

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debt on their balance sheet so it is a

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little bit uh it's it's another risk

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factor that visa and MasterCard doesn't

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have to deal with where American Express

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and discover Financial will have to Care

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on the debt so so far they have not been

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affected as you can see for the dividend

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triangle we do have pretty solid numbers

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so Revenue growth at 8% earnings per

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share at seven the dividend 10 to 12% %

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so that is pretty good numbers but

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they're not as good as MasterCard and

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visa and when we look at their stock

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cards and this is where I'm willing to

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discard both of them if I have to make a

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choice it is going a lot like you can

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see that the earnings and the revenue

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got affected a lot more during the

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pandemic and that also created a pause

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in their dividend growth policy if we

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look at Discovery we are going to have a

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similar result actually even worse right

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now we see that earnings are going down

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it's the only company where the earnings

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are going down while the other three are

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keeps on rocking the boat and again they

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have to pause their dividend growth

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policy during the covid and it's normal

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because they are subject to any

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recession they will be affected by those

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for for those Reasons I'm ready to take

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those one out and just focus on Visa and

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MasterCard if you wi this far this video

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and you are interesting in interested in

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finding companies like visa and

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MasterCard that has a low yield but a

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high dividend growth rate well I do have

play17:42

the perfect guide for you to build your

play17:44

entire portfolio around this strategy

play17:46

and it is called dividend income for

play17:48

Life the guide is 100% free you just

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have to key in your email you will

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receive it in your mailbox uh that is my

play17:55

way to communicate with you and send you

play17:57

even more resources CU we do have have a

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secret Resource page with a lot more

play18:02

resource that can help you become a

play18:04

better investor grow your conviction and

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have kind of like a mind map here where

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to know how to build a low yield high

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growth type of thought type of portfolio

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that will do not only good during your

play18:19

accumulation phase but will actually be

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better in the retirement phase and in

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the guide I explain you why focusing on

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high yield is a lot riskier here and

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could put your your retirement into J

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party versus looking at the low yeld

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High gr stocks will sustain the dividend

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payment that you need and generate

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enough revenue for you to retire

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stressfree so just go on dividend

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stock.com

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income download the report and you can

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thank me later so overall to end up this

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epic battle between an amazing company

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and an amazing company I would say that

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there are a few things that you can

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decide to pick one or the other and I

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would like end it up saying both of them

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could be in your portfolio but do not I

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would count them as only one position so

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if you would like to have a 4% position

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in a company like this I would go 2%

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MasterCard to Visa but if you really

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want to have only one stock in your

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portfolio you can use the following

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criteria to make your decision so if you

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want to pick the one that is performing

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the best best right now in terms of

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financial metrics and looking at the

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dividend triangle MasterCard is a clear

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winner so slightly better for Revenue

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growth slightly better for earnings and

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slightly better for dividend while if

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you're better everywhere this is called

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performance on the other side Visa

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trades at a cheaper value and is the

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leader in the market personally I prefer

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to buy leaders uh but it's just to give

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me a nishal sense of conviction and

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confidence in the business

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again both companies looks great I'm

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super happy with my chose with Visa but

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MasterCard could have been a pretty

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solid performer in my portfolio as well

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and if I look at the past five and 10

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years well the choice would have been

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better off with Master cards I have to

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tell you past historical returns both

play20:17

are crazy but MasterCard still a little

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bit ahead of the other two so that

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concludes my epic battle I'm happy with

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Visa but you could be happy with

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MasterCard and if you if you want to

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have both well just split your position

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in two and then it's a done deal let me

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know in the comment which one you have

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and ironically I use MasterCard as a

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credit card but I do not use at Visa I

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just keep it in my portfolio so let me

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know which is your favorite credit card

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company and we're going to continue this

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discussion in the comments below all

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right guys take good care don't forget

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to like the channel subscribe and we're

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going to talk again next Thursday until

play20:57

then don't forget to stay invested

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Related Tags
VisaMasterCardBusiness ModelInvestment AnalysisStock ComparisonDividend GrowthCredit Card IndustryFinancial SectorTechnology SectorConsumer Discretionary