Visa Hits 52-Week High On Strong Q2 Earnings, Recent Deals

On Aug 23, 2016, shares of Visa Inc. (NYSE:V) hit a new 52-week high of $81.76 driven by strong third-quarter fiscal 2016 results. Investors seem to have been impressed with the company’s robust quarterly performance as about 9.8 million shares exchanged hands in the last trading session.

Visa’s fiscal third-quarter earnings of 69 cents per share beat the Zacks Consensus Estimate of 67 cents. Notably, the Zacks Rank #3 (Hold) Financial Transaction Services provider met expectations in all of the last four quarters with an average beat of 1.87%

The robust quarterly results were supported by a 6% year-over-year increase in revenues on a constant dollar basis. Also, adjusted operating expenses dipped 7% year over year due to control on personnel and marketing costs.

Investors are also optimistic about the company’s inorganic growth initiatives. The recent acquisition of Visa Europe strengthens its position in the payments market and will lend it a competitive edge as it anticipates Europe to be a $3.3 trillion payments market and a high growth region in the future. Visa expects Visa Europe to add 2–3% to earnings in fiscal 2017.

Another milestone achieved by the company is the agreement reached with PayPal Holdings, Inc. (PYPL) which ends years of acrimony between the players over digital payments. The deal will lead to higher transactions through Visa’s network.

Also, recent deals with TD in the United States and Canada for continued Visa credit and debit issuance helped the company to pave the way for long term growth. Regions Bank, Chevron (NYSE:CVX), Costco (NASDAQ:COST) U.S., Homeplus in South Korea, Taichung Bank in Taiwan, Mandiri in Indonesia bode well for the company's transaction growth and infuses investors’ confidence in the company.

Stocks that Warrant a Look

Investors can also consider some better-ranked stocks from the finance industry like JetPay Corporation (NASDAQ:JTPY) , Wex Inc. (NYSE:WEX) and Credit Acceptance Corp. (NASDAQ:CACC) . While JetPay and WEX carry a Zacks Rank #2 (Buy), Credit Acceptance sports a Zacks Rank #1 (Strong Buy).