All eyes have been on inflation rates in the United States in 2022. The Consumer Price Index (CPI) was
unchanged at 8.5% in the month of Jul in the U.S. That still represented a 17-year high. North
Americans have built up immense credit in the 21 st century. Interest rate hikes will mean that top credit
card companies will see their profit margins bolstered in the months ahead.
Last year, Allied Market Research estimated that the global credit card payments market revenue was
valued at $138 billion in 2020. The report projects that this market will reach $263 billion by 2028. That
would represent a strong CAGR of 8.5% over the forecast period.
VISA (NYSE:VISA) is one of the strongest U.S. stocks to target in this environment. This San Francisco-
based company is the second-largest card payment company on the planet, and one of the largest
companies in the U.S. Shares of VISA have dropped 9% in 2022 as of close on August 30. The stock is
down 12% in the year-over-year period.
The company unveiled its third quarter fiscal 2022 earnings on July 26. Net revenues climbed 19% year-
over-year to $7.3 billion. Meanwhile, it reported GAAP net income of $3.4 billion or $1.60 per share – up
32% and 36%, respectively, compared to the third quarter of fiscal 2021. It posted payments volume
growth of 12%.
This stock last had a price-to-earnings ratio of 30, which puts VISA in favourable value territory relative
to its industry peers. It is on track for strong earnings growth going forward.