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Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
Mastercard (NYSE:MA)
- The pandemic led to a nearly 10% decrease in sales in 2020 but Mastercard’s sales are now well above where they were before Covid-19 hit as volumes have returned nicely.
- Profitability has recovered as well with net margins an incredible 54.2% over the trailing 12 months.
- The gusher of cash Mastercard kicks off continues to flow straight back to shareholders, with $6.3bn spent on buybacks and $1.4bn in dividends paid through the first nine months of 2022 alone. Mastercard’s outstanding share count has shrunk 9.9% over the five years to 2021 thanks to those buybacks, which means year by year each shareholder owns a bit more of the company.
- At 34 times trailing earnings Mastercard trades at a premium valuation. But one we find hard to quibble with due to its duopoly market position, the tailwinds likely to drive ever more spending onto card networks in the future, and the enviable financials of the business.
