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Featured Content from MarketBeat.com Why Mastercard and Visa Are the Definition of Forever StocksAuthor: Jordan Chussler. Originally Published: 3/14/2026. 
Key Points - The financials sector has lagged the S&P 500 this year, but two payment processing giants continue to deliver the kind of margins and earnings consistency that define long-term holdings.
- Despite recent sector-wide struggles, Visa and Mastercard function as a veritable duopoly, controlling over 90% of payments outside of China.
- Visa hasn't missed on earnings in 10 years, while Mastercard has secured 21 consecutive quarterly beats.
- Special Report: Elon Musk's $1 Quadrillion AI IPO
After finishing the past two years with an average annual gain of nearly 23%, the financials sector has struggled this year. With a year-to-date loss of around 9%, the cohort ranks last among the S&P 500's 11 sectors. Zooming out, however, the companies that make up the sector have proven to be important holdings for buy-and-hold investors. America, 1781—the war for independence is grinding on with soldiers marching barefoot through the snow, paid in scraps of paper called Continentals that no one wants because inflation has ravaged its value. Desperate soldiers, farmers, and merchants sell them for pennies on the dollar, but a few contrarians believed America would win and quietly bought up these discarded scraps, and when Alexander Hamilton announced the new government would redeem them in full, speculators who bought continentals made returns of 100-to-1 in one of the most asymmetric trades in financial history. What Erez Kalir and I have discovered is a modern-day equivalent—a misunderstood, grossly mispriced currency asset hiding inside a boring blue-chip company, mispriced not by a few points but by tens of billions, where the asset Wall Street is overlooking is worth more than the entire legacy business itself. See the full story in our latest broadcast now With high-quality growth stocks increasingly difficult to find, two legacy firms that operate in global payment processing and digital payments continue to produce profit margins and growth characteristics that qualify them as classic "forever stocks." Why Digital Payment and Payment Processors Make for Good Forever Stocks These companies have historically enjoyed higher profit margins than many other industries thanks to high-volume demand, extensive automation and technology-driven models that translate into very low marginal costs per transaction. The industry is also positioned for strong growth. According to industry analytics firm Grand View Research, the global payment processing solutions market, valued at nearly $48 billion in 2022, is projected to grow at a compound annual growth rate (CAGR) of 14.5% through 2030, reaching nearly $140 billion by the start of the next decade. Grand View also forecasts that the digital payment market, valued at more than $114 billion in 2024, will expand at a 21.4% CAGR through 2030, reaching more than $361 billion. While that degree of growth and attractive gross margins could suggest a crowded space, two of the biggest names in the industry continue to operate in a veritable duopoly, controlling over 90% of credit card and digital payments processed outside of China. With roots dating back to the mid-1900s, these companies control a large portion of the payments infrastructure, allowing them to set fees, limit competition and maintain very strong margins. Despite competition from companies such as Block (NYSE: XYZ), with its Cash App, and PayPal (NASDAQ: PYPL), with Venmo, none fit the bill of a long-term, defensive payments holding better than the two below. Mastercard: The $450 Billion Market Cap Company Focusing on Tech Integration Since Michael Miebach became CEO of Mastercard (NYSE: MA) in 2021, the company's management has emphasized expanding tech platforms, supporting cross-border commerce and developing services that help clients reduce fraud, streamline payment flows and extract insights from payments data. Those initiatives helped Mastercard deliver record revenue and net income in 2025. Revenue of nearly $33 billion represented a year-over-year increase of more than 16%, while net income of nearly $15 billion rose by a similar margin. That profitability was driven in large part by a 100% gross margin in 2025, made possible by tech integrations and a minimal cost of goods sold, so the company's quarterly gross profit consistently matched its quarterly net revenue. For investors, that has translated into steady earnings performance. The last time Mastercard missed on earnings was Q3 2020 after the onset of the COVID-19 pandemic. Since then, the company has recorded 21 consecutive quarterly earnings beats. Most recently, it reported Q4 2025 EPS of $4.76, a nearly 25% year-over-year increase. Analysts expect Mastercard's earnings to grow roughly 17% in the year ahead, from $15.91 to $18.61 per share. At the same time, Mastercard has been shifting from a traditional payment network toward an AI-driven, software-focused enterprise that emphasizes enhanced security, simplified B2B transactions with virtual cards and agentic AI tools. On top of that, Mastercard pays a dividend. While its yield is modest (currently 0.69%), the company has increased the payout for 13 consecutive years, maintains a sustainable payout ratio of about 21% and has an annualized five-year dividend growth rate of roughly 13.7%. Visa: Evolving and Adapting Since 1958 Visa (NYSE: V) uses a network-based model that enables partner banks and other financial institutions to issue branded payment products while the company focuses on infrastructure, standards and technology integration. Like Mastercard, Visa is rapidly adopting fintech innovations, emphasizing AI-driven solutions and blockchain-based settlement, with the goal of shifting from traditional card-based transactions to more flexible, digital-first experiences. Those efforts helped Visa also report record revenue and net income in 2025. Revenue reached $40 billion—an 11% year-over-year increase—and net income was nearly $20 billion. Visa's consistency on the bottom line is noteworthy: it has not missed on earnings once in the past 10 years. During that stretch, the company met analyst expectations twice and beat EPS estimates 38 times. Much of that stability stems from Visa's roughly 83% gross profit margin in 2025, which aligns with its 10-year average. Like Mastercard, Visa pays a modest dividend (currently yielding about 0.87%). Its payout ratio is around 25% and its annualized five-year dividend growth rate is approximately 14.5%. The company has increased its dividend for 17 consecutive years. | 
