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Visa: a price worth paying

The global payments giant's cash generation looks set to run
Visa: a price worth paying
  • A long-term play on the move to a cashless society
  • Outlook for cash generation, margins and brand power remains strong
IC TIP: Buy at $211.31
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
  • Earnings forecast to double by 2024
  • Dominance in payments infrastructure
  • Asset-light balance sheet
  • Track record of earnings beats
Bear points
  • Potential regulatory headwinds
  • Uncertain recovery in retail spending

A defendable market position, sky-high margins, excellent cash conversion, "network effects", huge room for growth: global payments giant Visa (US:V) possesses each of these qualities and more. Despite big dents to consumer confidence and spending over the last year, the group’s position at the centre of commerce looks unassailable and should even accelerate as we emerge from the pandemic. Long before Covid-19 struck, these strengths were reflected in a deservedly rich rating, and the stock has a worthy place among our World’s Best Shares.

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