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Just For You Why Mastercard and Visa Are the Definition of Forever StocksSubmitted by Jordan Chussler. Publication Date: 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: This Could Turn $100 into $100,000
After averaging nearly 23% annually over the past two years, 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 within the sector have proven to be durable components of buy-and-hold portfolios. Mark Your Calendar: April 20 A $7 trillion global race for a critical new resource is underway. Fox News calls it the "new arms race." And Nvidia's CEO says this vital new resource will create more millionaires in the next 5 years than the internet created in the last two decades. On April 20, a major event could ignite a handful of under-the-radar stocks. Click here now for all the details With high-quality growth stocks increasingly hard to find, two legacy companies in global payment processing and digital payments continue to produce profit margins that qualify them as "forever stocks." Why Digital Payment and Payment Processors Make for Good Forever Stocks These firms typically enjoy higher profit margins than many other industries because of high-volume demand, extensive automation and technology-driven models that keep marginal costs per transaction very low. The industry is also positioned for strong growth. According to 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 the digital payment market, valued at more than $114 billion in 2024, will expand at a 21.4% CAGR through 2030 to more than $361 billion. Despite that projected growth and attractive gross margins, two of the biggest names in the industry operate in what is effectively a duopoly, handling over 90% of credit card and digital payments processed outside of China. With histories dating back to the mid-1900s, these firms control much of the payments infrastructure, allowing them to influence fees, limit competition and sustain strong margins. While companies such as Block (NYSE: XYZ) with Cash App and PayPal (NASDAQ: PYPL) with Venmo aim to disrupt the space, two incumbents stand out as classic forever-stock candidates. 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 developing services that help clients reduce fraud, streamline payment flows and extract insights from payments data. That strategy 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 also rose by more than 16% year over year. Profitability was driven in large part by a 100% gross margin throughout 2025, enabled by tech integrations and minimal cost of goods sold; quarterly gross profit effectively matched quarterly net revenue. For investors, that has translated into consistent earnings performance. The last time Mastercard missed analyst expectations was Q3 2020 after the onset of the COVID-19 pandemic. Since then the company has delivered 21 consecutive quarterly earnings beats. Most recently, Mastercard reported Q4 2025 EPS of $4.76, a nearly 25% increase year over year. Analysts expect earnings per share to rise about 17% over the next year, from $15.91 to $18.61. The company is also embracing broader fintech trends, shifting from a traditional payments network to a more AI-driven, software-focused enterprise that emphasizes enhanced security, simplified B2B transactions with virtual cards and AI-powered tools. Additionally, Mastercard pays a dividend. While the yield is modest (currently about 0.69%), the company has increased its payout for 13 consecutive years, maintains a sustainable payout ratio (around 21.07%) and has a five-year annualized dividend growth rate near 13.7%. Visa: Evolving and Adapting Since 1958 Visa (NYSE: V) operates a network-based model that lets partner banks and financial institutions issue branded payment products while Visa focuses on infrastructure, standards and technology integration. Like Mastercard, Visa is rapidly integrating fintech capabilities, concentrating on AI-driven solutions and exploring blockchain-based settlement with the aim of shifting from traditional card-based transactions to more flexible, digital-first experiences. That focus helped Visa report record revenue and net income in 2025, with revenue of about $40 billion (an 11% year-over-year increase) and net income near $20 billion. Visa's earnings consistency is notable: it has not missed analyst expectations in the past 10 years, meeting expectations twice and beating EPS estimates 38 times during that period. Much of that stability stems from strong margins; Visa generated nearly an 83% gross profit margin in 2025, consistent with its 10-year average. Like Mastercard, Visa pays a modest dividend (currently yielding about 0.87%). Its payout ratio is a healthy ~25.14%, the five-year annualized dividend growth rate is roughly 14.48%, and the company has raised its dividend for 17 consecutive years. |
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