Mastercard Benefits as European Credit Card Use Rises (MA)

The use of credit and debit cards is on the rise in Europe, despite the region’s sovereign debt crises, and Mastercard Inc (MA) is benefiting from the strong consumer spending.

Mastercard has said that it’s benefiting from strong consumer spending in Nordic countries, the Netherlands, Germany and in Eastern Europe. Moreover, the consumers are foregoing cash to use plastic in their purchases, directly benefiting Mastercard.

Last year, the value of European transactions processed by Mastercard climbed 9.3% to $1.1 trillion on a local currency basis.

It seems as though European’s economic woes has not had the devastating impact on consumer spending as one would expect.

However, the upswing in European usage is not without some bumps in the road. The company faces stiff competition from Visa (V), which is the world’s biggest payments network. Mastercard is attempting to increase its global presence, not only in Europe, but in emerging markets like Myanmar, Ghana, and others.

Mastercard is also facing pressure from French regulators to lower its service fees, another hurdle Mastercard must maneuver in Europe.

Mastercard shares were up slightly during morning trading on Tuesday. The stock is up +21.24% over the past year.

The Bottom Line
Shares of Mastercard (MA) have a dividend yield of 0.47% based on Tuesday’s intraday trading price of $515.71 and the company’s annualized dividend payout of $2.40 per share.

Mastercard Inc (MA) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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