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This Week's Exclusive Story Why Mastercard and Visa Are the Definition of Forever StocksSubmitted by Jordan Chussler. Publication Date: 3/14/2026. 
Key Takeaways - 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.
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. But zooming out, the companies that call the sector home have proven to be key components of buy-and-hold investors' portfolios. With high-quality growth stocks increasingly difficult to identify, two legacy companies operating in global payment processing and digital payments continue to produce profit margins 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 because of high-volume demand, ease of automation, and technology-driven business models that translate into low marginal costs per transaction. The industry is also poised 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 grow at a 21.4% CAGR through 2030, reaching more than $361 billion. While that degree of growth and attractive gross margins could suggest crowded conditions, two of the biggest names continue to operate in a veritable duopoly, processing over 90% of credit card and digital payments outside of China. With roots dating back to the mid-1900s, these companies control much of the payment infrastructure, allowing them to influence fees, limit competition, and maintain strikingly strong margins. Although companies such as Block (NYSE: XYZ), with its peer-to-peer payment service Cash App, and PayPal (NASDAQ: PYPL), with its popular Venmo platform, aim to be disruptors, none fit the bill of a reliable forever stock better than the following two. Mastercard: The $450 Billion Market Cap Company Focusing on Tech Integration Since Michael Miebach took the reins at Mastercard (NYSE: MA) in 2021, management has focused on expanding its tech platforms, supporting cross-border commerce, and developing services that help clients reduce fraud, streamline payment flows and leverage payments data for insights. Those efforts helped Mastercard deliver record revenue and net income in 2025. Revenue of nearly $33 billion represented a year-over-year (YOY) increase of more than 16%, while net income of nearly $15 billion also rose by more than 16% YOY. That profitability was driven in large part by a 100% gross margin throughout 2025, made possible by tech integrations and a minimal cost of goods sold, which resulted in the company's quarterly gross profit closely matching its quarterly net revenue. For investors, that has translated into a strong run of earnings performance. The last time Mastercard missed an earnings estimate was Q3 2020 following the onset of the COVID-19 pandemic. Since then, the company has posted 21 consecutive quarterly earnings beats. Most recently, Mastercard reported Q4 2025 EPS of $4.76, a nearly 25% increase year over year. Mastercard's earnings are expected to grow roughly 17% in the year ahead, from $15.91 to $18.61 per share. At the same time, the company has been embracing broader fintech trends. Mastercard has shifted from a traditional payment network toward an AI-driven, software-focused enterprise emphasizing enhanced security, simplified B2B transactions with virtual cards, and agentic AI tools. Icing the cake, Mastercard pays a dividend. While its yield is modest (currently 0.69%), the company has increased its payout for 13 consecutive years. Mastercard maintains a sustainable dividend payout ratio of 21.07% and an annualized five-year dividend growth rate of 13.70%. Visa: Evolving and Adapting Since 1958 Visa (NYSE: V) operates a network-based model that enables partnering banks and other financial institutions to issue branded payment products while Visa focuses on infrastructure, standards, and technology integration. Like Mastercard, Visa is rapidly integrating fintech, concentrating on AI-driven solutions and blockchain-based settlement, with the goal of transitioning from traditional card-based transactions to more flexible, digital-first experiences by 2026. That strategy helped Visa report record revenue and net income in 2025, with revenue of $40 billion—an 11% YOY increase—and net income near $20 billion. Visa has not missed an earnings estimate in the past 10 years. During that stretch, the company met analyst expectations twice and beat EPS expectations 38 times. Much of that consistency stems from Visa's strong margins: the company reported a nearly 83% gross profit margin in 2025, consistent with its 10-year average. Like its counterpart, Visa also pays a modest dividend that currently yields 0.87%. Its dividend payout ratio is a healthy 25.14%, and its annualized five-year dividend growth rate is 14.48%. Visa has increased its payout for 17 consecutive years.
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