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Here's How Much You'd Have If You Invested $1000 in Visa a Decade Ago

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Visa (V - Free Report) ten years ago? It may not have been easy to hold on to V for all that time, but if you did, how much would your investment be worth today?

Visa's Business In-Depth

With that in mind, let's take a look at Visa's main business drivers.

Incorporated in 2007 as a Delaware stock corporation and headquartered in San Francisco, CA, Visa Inc. operates as a payments technology company all over the world. The company went public in March 2008 via an initial public offering (IPO). It was founded in 1958. The company has evolved and grown over the course of the last six decades:

It provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform. It offers a wide range of Visa-branded payment products, which its financial institution clients would develop and offer core business solutions, credit, debit, prepaid and cash access programs for account holders (individuals, businesses and government entities).

Visa provides other value-added services to its clients including fraud and risk management, debit issuer processing, loyalty services, dispute management, digital services like tokenization as well as consulting and analytics. It manages and promotes its brands to the benefit of its clients and partners through advertising, promotional and sponsorship initiatives with the Olympic Games, FIFA and the National Football League among others.

In recent years, the company has evolved its organization to accelerate the migration of digital payments across new channels including e-commerce, mobile and wearables. The company has adopted new digital payment and security technologies, such as contactless and tokenization.

It has accelerated the pace of change in digital payments by making application programming interfaces (APIs) available in an effort to increase access to its network, products and services, offering innovation opportunities at its 10 global innovation network locations and building partnerships with new players, such as financial technology companies, or fintechs.

As the company's activities are heavily interrelated, it has one reportable segment, Payment Services. The primary revenue segments are: Service revenues (36% of gross revenues in fiscal 2021), Data Processing revenues (34%), International Transaction revenues (25%) and Other revenues (5%).

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Visa a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in April 2012 would be worth $7,673.22, or a gain of 667.32%, as of April 4, 2022, and this return excludes dividends but includes price increases.

The S&P 500 rose 222.75% and the price of gold increased 10.16% over the same time frame in comparison.

Going forward, analysts are expecting more upside for V.

Numerous buyouts and alliances conducted by Visa paved the way for long-term growth and consistently drove its revenues. Its investments in technology are solidifying its position in the payments market. A shift in payments to the digital mode is a boon. The coronavirus vaccine rollouts and the gradual revival of consumer confidence will keep driving spending, expanding business volumes in turn. Backed by its strong cash position, it remains committed to boost its shareholder value. Its balance sheet strength is commendable. However, high operating expenses stress the margins. Ramped-up client incentives will dent the top line. Its declining cash volume from the Asia Pacific bothers. Its volumes will likely suffer due to the Russia-Ukraine situation. Visa's stock has shed less value than its industry in a year's time.

The stock is up 13.02% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2022. The consensus estimate has moved up as well.

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