Cramer Compares Mastercard, Visa Stock
Cramer compared Mastercard stock to Visa stock on Monday to determine which is the better buy. After doing some research, the “Mad Money” host prefers Mastercard stock.
Compared to Visa , Cramer noted Mastercard has greater international exposure. Mastercard gets 60 percent of its revenues from outside of the U.S., while Visa gets just 44 percent from international markets.
Mastercard is also increasing its market share, Cramer said. It’s currently the number two player with 30 percent of global credit card volumes and 12 percent of global debit volumes, while Visa has 46 percent of the global credit card volumes and 59 percent of the global debit volumes. Mastercard benefits from being the smaller player, Cramer said, because it has more to gain over time.
And while Visa has higher margins, Cramer said Mastercard has more room to improve as it becomes larger and more profitable. Visa has operating margins of 64 percent while Mastercard's operating margin came in at 55.1 percent last quarter. As Mastercard takes share, Cramer thinks its margins will continue to improve.
Bottom line: Cramer prefers Mastercard stock over Visa, but would use weakness to buy shares little by little.