VISA INC. NYSE-V TIMELINESS SAFETY TECHNICAL 2 1 2 RECENT PRICE High: Low: Lowered 2/12/16 27.4 RELATIVE DIV’D Median: NMF) P/E RATIO 1.49 YLD 0.8% 73.40 P/ERATIO 25.1(Trailing: 22.5 10.9 22.4 10.4 24.3 16.2 25.9 16.9 38.1 24.6 55.7 38.5 67.3 48.7 81.0 60.0 Target Price Range 2018 2019 2020 LEGENDS 20.0 x ″Cash Flow″ p sh . . . . Relative Price Strength 4-for-1 split 3/15 Options: Yes Shaded area indicates recession Raised 5/16/14 Raised 1/22/16 BETA 1.00 (1.00 = Market) 2018-20 PROJECTIONS VALUE LINE 160 120 100 80 60 50 40 30 Ann’l Total Price Gain Return High 110 (+50%) 11% Low 90 (+25%) 6% Insider Decisions to Buy Options to Sell A 0 0 0 M 0 0 0 J 0 0 0 J 0 0 0 A 0 0 0 S 0 0 0 O N 0 0 0 12 0 0 D 0 2 1 % TOT. RETURN 1/16 Institutional Decisions 1Q2015 2Q2015 3Q2015 623 659 741 to Buy to Sell 573 567 533 Hld’s(000)179518017953541805196 Percent shares traded 75 50 25 1 yr. 3 yr. 5 yr. THIS STOCK VL ARITH.* INDEX 17.7 92.9 343.1 -10.4 20.6 40.9 20 15 Visa Inc. is the result of the merger of Visa 2005 2006E 2007E 2008 2009 2010 2011 2012 2013 2014 2015 2016 © VALUE LINE PUB. LLC 18-20 USA, Visa International, Visa Canada, and ---2.03 2.28 2.73 3.25 3.84 4.49 5.03 5.65 6.20 Revenues per sh AE 8.75 Inovant. The reorganization was completed ---.63 .80 1.09 1.39 1.67 2.05 2.44 2.82 3.25 ‘‘Cash Flow’’ per sh 4.30 in October 2007. In March of 2008, the com---.56 .73 .98 1.25 1.55 1.90 2.27 2.62 3.00 Earnings per sh ABF 4.00 pany went public, offering 1.62 billion shares ---.03 .11 .13 .15 .22 .80 .33 .42 .50 .60 Div’ds Decl’d per sh G at an initial price of $11 (figures adjusted for ---.13 .10 .08 .12 .14 .18 .22 .17 .25 Cap’l Spending per sh .30 3/15 stock split). It raised $17.9 billion in the ---6.86 7.64 8.46 9.35 10.19 10.24 10.86 12.15 13.20 Book Value per sh D 17.30 largest IPO in U.S. history to date. Lead un--- - 3080.0 3036.0 2956.0 2828.0 2712.0 2624.0 2524.0 2457.0 2420.0 Common Shs Outst’g C 2400.0 derwriters were J.P. Morgan and Goldman ---32.6 20.3 20.5 15.7 18.2 21.8 24.6 26.5 Avg Ann’l P/E Ratio 25.0 Sachs, which led a team of other main un---1.96 1.35 1.30 .98 1.16 1.22 1.30 1.35 Relative P/E Ratio 1.55 derwriters and several small banks. ---.1% .7% .6% .8% .8% .8% .8% .7% Avg Ann’l Div’d Yield .8% CAPITAL STRUCTURE as of 12/31/15 Tot. Debt $15.9 bill. LT Debt $15.9 bill. (35% of cap’l) Leases, Uncapitalized Annual rentals $76 mill. No Defined Benefits Plan Pfd Stock None Common Stock 2184.1 million shares (includes 1919.1 mill. shs. of class-A common stock) MARKET CAP: $160 billion (Large Cap) CURRENT POSITION 2014 2015 12/31/15 ($MILL.) Cash Assets 1971 3518 12837 Receivables 822 847 922 Other 6769 5656 11714 Current Assets 9562 10021 25473 Accts Payable 147 127 118 Debt Due ---Other 5859 5228 5239 Current Liab. 6006 5355 5357 -------------- 2948 30.3% 140 455 34.8% 15.4% 201 41 583 NMF NMF NMF -- 3590 37.3% 137 739 36.0% 20.6% d775 -d501 ----- 6263 46.9% 237 1700 23.8% 27.1% 4009 -21141 8.0% 8.0% 7.6% 5% 6911 54.5% 226 2213 42.7% 32.0% 4799 44 23189 9.5% 9.5% 8.2% 14% 8065 60.2% 265 2966 36.1% 36.8% 5236 32 25011 11.8% 11.9% 10.4% 12% 9188 62.5% 288 3650 35.5% 39.7% 5739 -26437 13.8% 13.8% 12.2% 12% 10421 63.1% 333 4203 33.4% 40.3% 3832 -27630 15.2% 15.2% 13.1% 14% 11778 64.8% 397 4980 31.4% 42.3% 3487 -26870 18.5% 18.5% 15.3% 17% 12702 64.0% 435 5438 29.6% 42.8% 3556 -27413 19.8% 19.8% 16.2% 18% 13880 68.9% 494 6328 29.6% 39.8% 4666 -29842 21.2% 21.2% 15.7% 19% 15000 65.0% 550 7250 33.0% 48.3% 6250 10000 32000 17.5% 22.5% 18.0% 19% Revenues ($mill) AEF Operating Margin Depreciation ($mill) Net Profit ($mill) AB Income Tax Rate Net Profit Margin Working Cap’l ($mill) Long-Term Debt ($mill) Shr. Equity ($mill) Return on Total Cap’l Return on Shr. Equity Retained to Com Eq All Div’ds to Net Prof 21000 65.0% 700 9600 33.0% 45.7% 7500 Nil 41500 23.0% 23.0% 18.0% 20% BUSINESS: Visa Inc. is the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes credit, debit, prepaid, and commercial payments, which are offered under the Visa, Visa Electron, Interlink, and PLUS brands. Visa/PLUS is one of the largest global ATM networks, offering cash access in local currency in more than 200 countries. Visa’s global network, VisaNet, delivers value-added processing, including fraud and risk management. Has about 8,500 employees. Off. and dir. own less than 1.0% of common stock (12/15 proxy). Chairman: Joseph W. Saunders. CEO: Charles W. Scharf. Inc.: DE. Address: P.O. Box 8999, San Francisco, CA 94128. Telephone: 415-932-2100. Internet: www.visa.com. Visa kicked off fiscal 2016 with decent first-quarter results. (Years end SepANNUAL RATES Past Past Est’d ’12-’14 tember 30th.) The electronic payments of change (per sh) 10 Yrs. 5 Yrs. to ’18-’20 processor generated $3.57 billion in reveRevenues - - 15.5% 10.0% nues during the three-month stretch, ‘‘Cash Flow’’ - - 23.0% 11.5% Earnings - - 23.5% 11.5% marking a 5.4% advance from the yearDividends - - 37.5% 14.5% earlier period. On the bottom line, the Book Value -7.5% 7.0% company earned $0.80 a share, representFiscal QUARTERLY REVENUES ($ mill.) AEF Full Year Fiscal ing a stellar 27.0% year-over-year imEnds Dec.31 Mar.31 Jun.30 Sep.30 Year provement. (We had looked for $3.73 bil2012 2547 2578 2565 2731 10421 lion and $0.74 a share on the top and bot2013 2846 2958 3001 2973 11778 tom lines, respectively.) 2014 3155 3163 3155 3229 12702 We expect this to be another record2015 3382 3409 3518 3571 13880 setting year for the Dow-30 com2016 3565 3785 3800 3850 15000 ponent. December-period revenues came Fiscal Full EARNINGS PER SHARE ABF Year Fiscal in lighter than we had anticipated, but Ends Dec.31 Mar.31 Jun.30 Sep.30 Year that was due almost entirely to unfavorab2012 .37 .40 .39 .39 1.55 le foreign exchange effects. Reading 2013 .48 .48 .47 .47 1.90 deeper, payments volume jumped 11% 2014 .55 .63 .54 .55 2.27 during the term—to a staggering $1.3 tril2015 .63 .63 .69 .67 2.62 lion; cross-border volume increased 4.0%; 2016 .80 .72 .74 .74 3.00 and total processed transactions expanded QUARTERLY DIVIDENDS PAID G CalFull 8.0%—to 19 billion. (All figures presented endar Mar.31 Jun.30 Sep.30 Dec.31 Year on a constant-dollar basis.) All told, the 2012 .055 .055 .055 .083 .25 top and bottom lines ought to advance 8% 2013 .083 .083 .083 .10 .35 and 14%–15%, respectively, in fiscal 2016. 2014 .10 .10 .10 .12 .42 There were a couple of other 2015 .12 .12 .12 .14 .50 noteworthy events during the Decem2016 ber period. First, Visa repurchased 25.7 million shares of class A common stock at an aggregate price of $2.0 billion. (It has $5.8 billion remaining on the current authorization, which works out to roughly 83.0 million shares at Visa’s recent quotation.) Meanwhile, it issued $15.9 billion of debt with a weighted-average interest rate and maturity of 3.08% and 13 years, respectively. The proceeds of the debt issuance will be used for the upfront cash portion of the planned acquisition of Visa Europe Limited, with the buyout expected to close during Visa’s June quarter. Timely (2, Above Average), goodquality (Safety: 1) Visa stock would make a fine addition to most portfolios. The card processor registers more transactions than its three closest competitors (MasterCard, American Express, and Discover Financial Services) combined, the balance sheet is in good shape (debt-to-total capital at 35%), and the company earns our Highest mark for Financial Strength (A++). In sum, total return potential to the end of this decade, and beyond, is decent on a risk-adjusted basis. Sharif Abdou February 12, 2016 (A) Fiscal year ends Sept. 30th. (B) Egs. based on adj. dil. class-A shares. Excludes nonrecur. charges: ’07, $2550 mill; ’08, $0.32; ’12, ($1.03). Next egs. rep. due in late Apr. (C) In millions of adj., dil. class-A common shares May not sum due to rounding and/or change in outstanding. (D) Includes intangibles. As of share count. (G) Div’d historically paid in mid12/31/15: $23.2 billion, $10.61 per share. (E) Feb., mid-May, mid-Aug., and mid-Nov. Prior to ’08, results are for Visa U.S.A. only. (F) © 2016 Value Line, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Company’s Financial Strength Stock’s Price Stability Price Growth Persistence Earnings Predictability A++ 75 85 100 To subscribe call 1-800-VALUELINE