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Mastercard Inc (MA) Receives High Rating from Warren Buffett Strategy

Mastercard Inc (MA) earns strong praise as it rates 86% under Warren Buffett's Patient Investor model, highlighting its potential. A high rating typically indicates a good stock to consider for investment.

Date: 
AI Rating:   7
Analysis of Mastercard Inc

According to the report, Mastercard Inc (MA) has received an impressive rating of 86% based on its fundamentals and stock valuation using the Patient Investor model, which follows the principles of Warren Buffett. This score signifies strong interest in the stock, as generally, scores above 80% are considered favorable.

The report highlights several key areas of performance where Mastercard has excelled:

  • Earnings Predictability: The stock passes this criterion, indicating consistent earnings performance.
  • Return on Equity (ROE): Mastercard has also passed this test, reflecting effective management in generating profits from shareholders' equity.
  • Return on Assets (ROA): A green pass in this area illustrates the efficient utilization of assets to generate earnings.
  • Free Cash Flow (FCF): This metric passed, suggesting that the company generates sufficient cash flow after accounting for capital expenditures.
  • Use of Retained Earnings: The passing score indicates that earnings are being effectively reinvested to fuel future growth.
  • Share Repurchase: The company has also passed this test, which indicates it may be returning value to shareholders through buybacks.

However, it is crucial to note that there is one criterion where the company did not meet expectations:

  • Initial Rate of Return: This aspect has failed, signalling potential concerns regarding the returns on initial investments.

Overall, while the passing scores in multiple key areas like ROE, ROA, and FCF imply solid performance and managerial effectiveness, the failing initial rate of return may raise some caution for investors.

Stocks:  MA