Core Viewpoint - Visa and Mastercard are high-quality enterprises with significant historical success, but they face risks from potential direct payment channels that could bypass their networks [1]. Group 1: Business Model and Risks - Visa and Mastercard operate global networks for processing card transactions, earning fees from billions of cards in circulation, which constitutes a financially successful business model [2]. - Merchants pay interchange fees, which can significantly reduce their margins, and if they could bypass card networks, they could save substantial amounts [2]. - Target's Circle Card offers a 5% discount to shoppers, potentially saving the retailer around $2.1 billion in interchange fees if all customers used it, highlighting the risk to Visa and Mastercard if other retailers adopt similar strategies [3]. Group 2: Competitive Position and Mitigants - Despite the risks from direct payment methods, Visa and Mastercard are highly profitable with high margins and strong free cash flow, benefiting from powerful network effects due to widespread card acceptance [4]. - The entrenched position of Visa and Mastercard in daily transactions and their importance to the global economy make them difficult to disrupt [4]. - Consumer preference for general-purpose credit cards, along with the ongoing trend towards cashless transactions, supports the continued growth of Visa and Mastercard, even in developed markets like the U.S. [5].

These stocks are poised for more gains in 2024 and beyond.It's a smart idea to consider what stocks billionaire investors are buying (or selling), and there's no better investor to follow in this regard than Warren Buffett, who has built a mountain of wealth for Berkshire Hathaway shareholders.Three Motley Fool contributors recently combed through Berkshire's holdings to find three stocks that are screaming buys right now. Let's see why they selected Mastercard (MA 0.30%), Louisiana-Pacific (LPX 0.84%), and ...

With its share price around $950, Nvidia could be a candidate for another stock split.Ahead of Chipotle Mexican Grill's planned 50-for-1 stock split, investors may be wondering which stock could be next.One candidate is Nvidia (NVDA -1.99%), whose stock has skyrocketed 230% over the past year and is now hovering around $950 per share. So, let's explore why a company might split its stock, Nvidia's history of stock splits, and whether investors should buy the chipmaker.What's a stock split?A stock split is a ...

Apple made headlines following its announced $110 billion share buyback, but another company also buying back stock may be the better opportunity.Earlier this month, iPhone maker Apple turned heads after announcing a $110 billion stock buyback. On the surface, this looks like great news for investors. However, I see the latest buyback as a way to distract investors from the operational challenges Apple faces. Investors may be finally getting fed up, as shares of Apple are modestly down over the last year.An ...

It's important for companies to remain flexible with their EV strategies at a time when the market is slowing. Ford is doing just that.It's easy for companies to make dramatic claims and pledges for future strategies, but when new information becomes available, they need to be just as willing to adjust those pledges. That's the scenario Ford Motor Company (F -0.81%) faces with its electric vehicle (EV) strategy in Europe, where it once made a pretty dramatic claim.But here's why it has 5.5 billion reasons t ...

The industry juggernaut has made shareholders rich in the past. This smaller online marketplace might have greater upside moving forward.Thanks to its monumental rise over the past couple of decades, Amazon (AMZN 0.58%) has become one of the world's most valuable enterprises. It carries a market cap of $1.9 trillion today. Early investors have probably gotten wealthy beyond their wildest dreams, as shares have skyrocketed 5,470% in the last 25 years. Amazon is certainly a magnificent stock. But is this othe ...

Nvidia may offer details about future growth in this week's earnings report...Nvidia's (NVDA -1.99%) best known for its graphics processing units (GPUs), the chips that are powering the crucial artificial intelligence (AI) tasks of training and inferencing. Thanks to the GPU's top speed, large language models (LLMs) process all of the data they need to go on do their job -- from offering us conversational assistants to streamlining a company's workflow.Though these chips play a key role in Nvidia's success, ...

Tesla has two secret weapons that will help it dominate the automotive industry.Tesla (TSLA 1.50%) is arguably one of the most successful companies in the last decade, turning around its business from the brink of bankruptcy to become one of the most-profitable car manufacturers globally.Despite its huge success, the company is not resting on its laurels. It's now aiming at the top position in the auto industry by selling 20 million electric cars in 2030, which is around twice the sales volume of Toyota, th ...

Altria business faces tough challenges, but it pays hefty dividends.The S&P 500 has gained more than 26% in the last year. However, it's important to remember that not all stocks benefit from a strong market.During this time, Altria Group (MO 0.28%) lost about 2%. Does this present a buying opportunity? Or should you sell the shares and invest that money elsewhere?To make that determination, it's time to better understand Altria's business and prospects. Declining businessAltria produces cigarettes, cigars, ...

High yields and a strong chance for steady payout raises in the years ahead make these great stocks to buy now.Investors looking to pad their passive income streams with high-yield dividend stocks have three excellent choices. If you have an extra $100 to invest, you could set yourself up with dividends from Realty Income (O -0.11%), Altria Group (MO 0.28%), or Pfizer (PFE -0.97%).All three of these dividend payers have long histories of steady annual dividend raises. Plus, they offer yields above 5% at rec ...