MA (Mastercard Inc) vs S&P 500 Comparison

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Mastercard Inc
Glance View

Economic Moat

Wide

Market Cap

526.4B USD

Industry

Technology

Mastercard Inc., a titan in the global payments industry, operates at the heart of the digital economy's relentless march forward. Established in the 1960s, the company initially started as a consortium of large banks seeking to offer a new kind of financial service—a plastic card that could be used universally and significantly ease the burden of carrying cash. Fast forward to the present, Mastercard has transformed into a technology company in the global payments space, facilitating transactions across a vast network that spans over 210 countries and territories. The company connects consumers, financial institutions, merchants, governments, and businesses worldwide, offering not merely a payment card but an intricate web of products and services that aim to make transactions faster, easier, and more secure. The genius of Mastercard’s business model lies in its "four-party" system: it connects the cardholder, merchant, issuing bank, and acquiring bank with precision and efficiency. Mastercard does not issue cards itself; instead, it licenses its brand and technology to banks and financial institutions, which in turn issue the cards to consumers. The company earns revenue primarily from transaction processing fees whenever a Mastercard is used, as well as additional fees for services related to fraud prevention, data analysis, and consulting. This model allows Mastercard to capture value by facilitating and securing transactions, taking advantage of the network effect where more cardholders and merchants fuel usage, thereby increasing volume and boosting revenues. As the world increasingly shifts to cashless transactions, Mastercard finds itself in a favorable position, acting as a key player and enabler in this global transformation.

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MA Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

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	Johnson & Johnson NYSE:JNJ	149.37 USD -3.09%
	Bank of America Corp NYSE:BAC	44.32 USD 2.21%
	Mastercard Inc NYSE:MA	578.49 USD 0.04%
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MA

vs

S&P 500

Stocks Performance
MA vs S&P 500

Performance Gap
MA vs S&P 500

Performance By Year
MA vs S&P 500

Competitors Performance
Mastercard Inc vs Peers

Mastercard Inc
Glance View

Company

Help

Tools

Stocks

US		Visa Inc NYSE:V	Add
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US	F	Fiserv Inc NYSE:FI	Add
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NL		Adyen NV AEX:ADYEN	Add
US		Paychex Inc NASDAQ:PAYX	Add
US		Fidelity National Information Services Inc NYSE:FIS	Add
ES		Amadeus IT Group SA MAD:AMS	Add
US		Broadridge Financial Solutions Inc NYSE:BR	Add
US		Toast Inc NYSE:TOST	Add

US		Visa Inc NYSE:V	Select
US		Automatic Data Processing Inc NASDAQ:ADP	Select
US	F	Fiserv Inc NYSE:FI	Select
US		PayPal Holdings Inc NASDAQ:PYPL	Select
NL		Adyen NV AEX:ADYEN	Select
US		Paychex Inc NASDAQ:PAYX	Select
US		Fidelity National Information Services Inc NYSE:FIS	Select
ES		Amadeus IT Group SA MAD:AMS	Select
US		Broadridge Financial Solutions Inc NYSE:BR	Select
US		Toast Inc NYSE:TOST	Select

	Johnson & Johnson NYSE:JNJ	149.37 USD -3.09%
	Berkshire Hathaway Inc NYSE:BRK.A	771 300 USD -0.1%
	Bank of America Corp NYSE:BAC	44.32 USD 2.21%
	Mastercard Inc NYSE:MA	578.49 USD 0.04%
	UnitedHealth Group Inc NYSE:UNH	311.18 USD -17.84%
	Exxon Mobil Corp NYSE:XOM	110.14 USD 0.9%

MA vs S&P 500

Stocks Performance MA vs S&P 500

Performance Gap MA vs S&P 500

Performance By Year MA vs S&P 500

Competitors Performance Mastercard Inc vs Peers

Mastercard Inc Glance View

Company

Help

Tools

Stocks

MA

vs

S&P 500

Stocks Performance
MA vs S&P 500

Performance Gap
MA vs S&P 500

Performance By Year
MA vs S&P 500

Competitors Performance
Mastercard Inc vs Peers

Mastercard Inc
Glance View