Meager Income

Pay Off Debt, Retire Comfortably on Meager Income, Win the Lottery, Not Necessarily in that Order

VISA Stock Split

Posted on | February 9, 2015 | No Comments

VISA recently announced a stock split. On March 19th, 1 current share of V will become 4 shares. Visa is currently trading at around $260 a share.  If it were to maintain this price each new share would be valued at about $65.  Although shareholders will still own the same portion of the business before and after the stock splits, I’m excited to have a larger number of shares. I also expect that the price will go up a little bit because the shares will become more affordable and more people will buy the stock. Although, Master Card also recently split their stock price hasn’t moved much post-split. Will the same happen to Visa?

I like Visa because of the dividend, they have a strong balance sheet and they are very profitable, they have potential for growth and I use their service(a lot!).

My analysis on Visa Inc.

Currently, V pays $1.92 a share per year in dividends. At the current price, you’ll be earning about 1%. This is a lower rate than I’d normally find acceptable except they are a great business. In 2008, they paid 21 cents and six years later they are now paying $1.92 a share. Between 2013 and 2014, they increased their dividend by 21% from $1.39 a share to $1.68. With a payout ratio of 18%, Visa can easily continue to pay the dividend and increase it in the future.

Visa currently has zero debt. Their return on invested capital is at 17.24%. Their return on Assets is at 14.91% and their return on equity is at 20%. Their cash flow per share is at $8.04 a share. These are great numbers!

Visa’s 1 year sales growth is at 6.97% but the 5 year is at 12.94%. Earnings per share grew at 14.62% last year while the 5 year growth rate was 25.32%. Earnings per share are expected to continue growing with the 1 year forecast at 14.42% and 3 to 5 year forecast at growth rate 14.07%

The only thing I don’t like about this stock is the valuation, I’d like for it to come down in prices so I can buy more shares! Do you own shares in Visa?


Leave a Reply

  • Recent Tags

  • Categories

  • Recent Posts