U.S. markets closed
  • S&P 500

    3,811.15
    -18.19 (-0.48%)
     
  • Dow 30

    30,932.37
    -469.64 (-1.50%)
     
  • Nasdaq

    13,192.35
    +72.92 (+0.56%)
     
  • Russell 2000

    2,201.05
    +0.88 (+0.04%)
     
  • Crude Oil

    61.66
    -1.87 (-2.94%)
     
  • Gold

    1,733.00
    -42.40 (-2.39%)
     
  • Silver

    26.70
    -0.98 (-3.56%)
     
  • EUR/USD

    1.2088
    -0.0099 (-0.81%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • GBP/USD

    1.3922
    -0.0091 (-0.65%)
     
  • USD/JPY

    106.5500
    +0.3200 (+0.30%)
     
  • BTC-USD

    44,620.84
    -2,952.25 (-6.21%)
     
  • CMC Crypto 200

    912.88
    -20.25 (-2.17%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    28,966.01
    -1,202.26 (-3.99%)
     

Visa Stock Will Bounce Back Fast From This Bear Market

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Louis Navellier and the InvestorPlace Research Staff
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

There’s no doubt that Visa (NYSE:V) stock is suffering along with the rest of Wall Street these days.

3 Reasons Visa Stock Remains a Solid Bet for Income Investors
3 Reasons Visa Stock Remains a Solid Bet for Income Investors

Source: Tada Images / Shutterstock.com

The famed credit card company’s stock is down 15% so far in 2020, but even that poor performance is better than the broader market that’s now in bear market territory.

Sure, it’s harder to be optimistic about stocks when the bears are running rampant for the first time in 11 years.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

But I’m still a fan of Visa stock, which continues to earn a solid B in my Portfolio Grader. It also offers income-hungry investors a solid dividend.

The Coronavirus Is Shaving Profits

Remember where we were just a couple of weeks ago: Visa was soaring over $210 per share while being a consistent winner for investors.

From the time of its IPO until before the coronavirus from China-induced selloff, V stock was up 1,200% from its IPO. It was making money from the transactions of more than 3.3 billion credit cards around the world.

But things change fast when something as horrid as a global pandemic comes in play. Visa announced this week that it will take a revenue hit of 2.5% to 3.5% in the second quarter. The virus is particularly impacting its cross-border business.

“Cross-border growth rates have deteriorated week by week since the coronavirus outbreak in China, and trends through Feb. 28, 2020 do not yet fully reflect the impact of the coronavirus spreading outside of Asia,” Visa said. “As such, we anticipate that this deteriorating trend has not bottomed out yet.”

Visa had originally predicted net revenue growth in the second quarter to be in the low double digits, so it’s possible that the company will see revenue fall below the 10% it recorded in the fiscal first quarter.

That’s not great news for Visa, but it’s important to acknowledge. Visa is doing the responsible thing in managing Wall Street’s expectations. This way there won’t be a negative surprise when it reports earnings again in April.

Visa’s Business Will Bounce Back

Visa and any other payment processor is going to fall on some hard times in a bear market. When the economy slows down, fewer people will be swiping their Visa cards while going out to eat or attending concerts.

But it’s also really important for investors to remember that this bear market is not a result of a bad market. Just a few weeks ago, we were all enjoying record high after record high.

The market fundamentals haven’t changed. This is a bear market that is based on fear and speculation. As the virus fades away — and it will fade away — Visa’s business model and plan will remain untouched.

The cashless economy — seen by the growing number of people who are conditioned to carry a credit or debit card instead of cash — will continue to benefit V stock for the long term.

Visa has a history of being a solid, if unspectacular, growth stock. Its earnings rose from $2.49 per share to $5.32 per share in the last three years. And they will continue to rise in the future. When this global health crisis is over, you can expect V stock to return to its former solid self and bring stability to your portfolio.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

More From InvestorPlace

The post Visa Stock Will Bounce Back Fast From This Bear Market appeared first on InvestorPlace.