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Monday's Bonus News Why Mastercard and Visa Are the Definition of Forever StocksSubmitted by Jordan Chussler. Posted: 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. Zooming out, however, the companies that make up the sector have proven to be key components of long-term, buy-and-hold portfolios. With high-quality growth stocks increasingly difficult to find, two legacy companies that operate in global payment processing and digital payments continue to deliver profit margins and consistency that qualify them as classic "forever" stocks. Why Digital Payment and Payment Processors Make for Good Forever Stocks These companies have historically earned higher profit margins than many other industries because of their high-volume demand, ease of automation, and technology-driven business models that translate into very low marginal costs per transaction. The industry is also poised for strong growth. According to 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. 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. Despite that growth and attractive gross margins, two of the biggest names remain dominant: they operate in what is effectively a duopoly, processing over 90% of credit card and digital payments outside China. With roots stretching back to the mid-1900s, these companies control much of the payment infrastructure, allowing them to set fees, limit competition, and maintain very strong margins. While companies such as Block (NYSE: XYZ), with Cash App, and PayPal (NASDAQ: PYPL), with Venmo, aim to disrupt the space, when it comes to durable, long-term holdings, none fit the bill 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, management has emphasized expanding tech platforms, supporting cross-border commerce, and building services that help clients reduce fraud, simplify payment flows, and extract insights from payments data. That focus 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. Much of that profitability reflects an effectively 100% gross margin throughout 2025, enabled by technology integrations and a minimal cost of goods sold; as a result, the company's quarterly gross profit closely matched its quarterly net revenue. For investors, that has translated into consistently strong 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% YOY increase. Analysts expect Mastercard's earnings per share to grow about 17% in the year ahead, from $15.91 to $18.61. At the same time, the company has been embracing broader fintech trends, 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. Additionally, Mastercard pays a dividend. While the yield is modest (currently 0.69%), the company has increased its payout for 13 consecutive years, maintains a sustainable payout ratio of about 21.07%, and has an annualized five-year dividend growth rate near 13.70%. Visa: Evolving and Adapting Since 1958 Visa (NYSE: V) operates a network-based model that enables partner 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 innovations, emphasizing AI-driven solutions and blockchain-based settlement, with a goal of moving from primarily card-based transactions to more flexible, digital-first experiences. As a result, Visa also reported record revenue and net income in 2025: revenue topped $40 billion—an 11% YOY increase—and net income approached $20 billion. Visa's earnings consistency is notable. The company has not missed an earnings estimate in the past 10 years: during that stretch it met expectations twice and beat EPS estimates 38 times. Much of this performance stems from Visa's long-term profitability: its gross profit margin was roughly 83% in 2025, consistent with its 10-year average. Like Mastercard, Visa pays a modest dividend, currently yielding about 0.87%. Its dividend payout ratio is around 25.14%, the annualized five-year dividend growth rate is roughly 14.48%, and the company has increased its payout for 17 consecutive years.
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