Mastercard Inc. vaulted into $400 billion territory for the first time Wednesday in a testament to confidence about consumer spending and momentum for digital payment methods.
Shares of Mastercard
MA,
finished Wednesday’s session up 1.3%, with a market capitalization of $401.6 billion, according to Dow Jones Market Data. The company is the 15th-largest public company in the U.S. by market value, ahead of Exxon Mobil Corp.
XOM,
and Johnson & Johnson
JNJ,
Rival Visa Inc.
V,
sits 10th with a $531.8 billion valuation.
Mastercard’s stock has gained 117% over the past five years, beating out the S&P 500
SPX,
which is up 83% over that span, as well as shares of Visa, which are up 91%.
Mastercard stock is a play on consumer spending, which the company says has remained resilient. The company also plays into the theme of cash displacement as consumers continue to make more of their purchases using credit cards.
“There remains a significant opportunity to convert cash and check to commercial card products,” Chief Executive Michael Miebach said on Mastercard’s last earnings call, noting that the company has been able to better capture transit spending thanks to the rise of contactless payments.
Mastercard’s status as a pure play on spending has made it a steady gainer even as more specialized payments names have fallen out of favor. PayPal Holdings Inc.
PYPL,
enjoyed a stint ahead of Mastercard by market cap back in February 2021 as investors cheered PayPal’s online-spending position during the pandemic. At the time, PayPal’s market cap stood at $340 billion while Mastercard’s clocked in at $337 billion, but PayPal’s valuation has since plunged to about $66 billion.
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