Do Mastercard's (NYSE:MA) Earnings Warrant Your Attention?
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money…
From the Equity Insider archive. This article dates from Jun 14, 2025 and is preserved as first published.
It’s common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Mastercard (NYSE:MA). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Mastercard’s Earnings Per Share Are Growing
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Mastercard has grown EPS by 14% per year. That’s a good rate of growth, if it can be sustained.
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow.
It’s often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company’s growth. While we note Mastercard achieved similar EBIT margins to last year, revenue grew by a solid 13% to US$29b. That’s encouraging news for the company!
The chart below shows how the company’s bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Are Mastercard Insiders Aligned With All Shareholders?
Since Mastercard has a market capitalisation of US$536b, we wouldn’t expect insiders to hold a large percentage of shares. But thanks to their investment in the company, it’s pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$209m. This comes in at 0.04% of shares in the company, which is a fair amount of a business of this size. This still shows shareholders there is a degree of alignment between management and themselves.
