Visa
Another factor boosting the stock price was the company hiking its dividend by 20%. Although Visa's dividend is quite low at 0.7%, it's becoming a leader in terms of dividend growth. Overall, Visa has been an outperformer this year with only a 3% loss YTD. Currently, share prices are off by a little more than 20% from their all-time highs in July of last year. Valuations have also come in as earnings are up by 30% over the past year, while the share price is flat.
Inside the Numbers
In its fiscal Q4, Visa reported $1.93 per share which topped expectations of $1.87 per share and was up 19% compared to the same quarter last year. Revenue also topped expectations at $7.8 billion vs expectations of $7.6 billion, an 11% increase from last year.
The most notable takeaway was the strength of the consumer as payment volume increased by 10% and processed transactions climbed 12% higher. The company also noted that its results are painting a different picture than the prevailing narrative as there has been no deterioration in terms of consumer spending so far this year.
The company said that it's assuming 'no recession' but is prepared to change course if necessary. For its next quarter, it sees high, single-digit revenue growth which is also inconsistent with an environment of weakness in consumer spending.
The company noted that travel continues to be particularly strong and there is continued evidence of 'pent-up demand'. It also sees international markets as ripe for continued growth as cross-border volume increased by 36% during the last quarter, an indication that international travel is coming back.
In addition to its dividend hike from $0.38 per share to $0.45 per share, it also announced a $12 billion stock buyback program which comes out to about 3% of the company's total market cap.
