Mastercard Inc
🇺🇸 MA · NYSE/NASDAQ · US57636Q1040
Bank
USD 494.20 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
28.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 494.20 ÷ 17.28 = 28.6
TTM period through: 2026-03-31
Forward P/E (estimated): 25.3
Based on analyst estimates
Reference: Provider P/E (Trailing): 28.3
Yield (Fwd)
0.70%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 0.66%
Div. Growth (5Y CAGR)
14.0%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
0.5x
Latest quarter: 1.9x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 1.9x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
20.1%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 18.2%
Cash Flow Payout (TTM): 15.6%
FCF Coverage (TTM): 6.24x
ROE
2.3%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
21.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Mastercard is an exceptional business operating a global payment duopoly with massive profit margins and pristine dividend safety. However, the current valuation around $494 (P/E 28.6) and a yield of 0.66% make it fundamentally unsuitable for new positions in an income-focused strategy requiring immediate yield. Existing shareholders should maintain positions given the flawless dividend growth and competitive moat, but new investors must wait for a significant market correction to create a viable entry point.
Sector Context
Mastercard operates a global payment network, facilitating electronic funds transfers worldwide through its ubiquitous branded cards. While categorized as a bank, it functions as an asset-light technology and infrastructure toll-road, benefiting from powerful network effects and completely avoiding the direct credit risk typically associated with traditional lending institutions.
📊 Strategy Analysis
- • Unmatched competitive moat as a global payment duopoly, generating extraordinary EBITDA margins of over 62% and consistent double-digit revenue growth.
- • Flawless dividend safety with an extremely conservative 18.6% payout ratio and massive free cash flow coverage of 6.2x, leaving ample room for future increases.
- • Stellar 10-year track record of consistent dividend payments with a 5-year growth CAGR of 14.0% and zero cuts.
- • Pristine balance sheet management with a Net Debt/EBITDA ratio of just 0.52x, offering exceptional resilience against macroeconomic shocks.
⚠ What to Watch
- • The 0.66% dividend yield falls drastically short of the strategy's 3% minimum requirement, making it currently unsuitable for immediate income generation.
- • Current valuation is highly stretched with a TTM P/E of 28.6, significantly exceeding the strategy's target range of 8-15x and offering limited upside.
- • Ongoing regulatory pressures and litigation risks, specifically the court review of a massive $38 billion swipe fee settlement with U.S. merchants.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.