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The Stock Market Just Had It’s Worst Day in Nearly A Year…

The S&P 500 dropped by 2.3% and Nasdaq 100 plummeted by 3.59%. Also, many popular stocks saw even more massive price declines. For example, Tesla is down over 12% after earnings, Google is down 5%, Nvidia down 6%, Broadcom down 7%, and that’s just the start.

One of my favorite dividend growth stocks, Visa (ticker symbol V), is down 4% after reporting Q3 2024 earnings. Today, I’m going to share why I think now is a great time to buy! On top of this, I’ll share breaking earnings news and some of the best dividend increases.

Let’s do this!

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THE KEY STORY

Why You Should Buy Visa Stock After Market Crash | V Stock 2024

Visa's Market Position

Visa is an iconic global brand, operating the largest digital payment network in the world. The company boasts a dominant market position with growing earnings, high free cash flow, significant share repurchases, and a fast-growing dividend payment. Despite these strengths, Visa's stock recently dropped by 4%, one of the largest one-day dips you'll see in a blue-chip company like Visa.

Financial Performance

Visa's stock is currently priced at $254.17, bringing the company's valuation to $508.59 billion. Based on the trailing 12 months, Visa has a lagging P/E ratio of 27.18, and the forward-looking P/E ratio for fiscal 2024 is 25.56. Visa is known for its high dividend growth, with a compound annual growth rate of 17.92% over ten years and a very low payout ratio of 20%. Despite the recent dip, the company continues to perform well financially, with strong cash flow and limited capital expenditures.

Key Earnings Highlights

In Q3, Visa reported net revenue of $8.9 billion, a 10% increase year-over-year. GAAP net income was up 17% year-over-year, and EPS rose 20% to $2.40. Non-GAAP net income increased by 9% to $4.9 billion, and non-GAAP EPS grew by 12% to $2.42. Key business drivers showed payment volume up 7%, cross-border volume up 14%, and processed transactions up 10% year-over-year. During the quarter, Visa spent $5.8 billion on share repurchases and dividends.

Concerns and Growth Projections

One concern noted is the slowing growth rates towards the end of Q3. Despite this, Visa continues to show positive growth in all key areas.

Analysts project Visa's EPS to grow by 11% in fiscal 2024, with continued growth expected in subsequent years. The current analyst price target for Visa is $284.53, suggesting the stock is 12% undervalued at its current price.

Long-term Outlook

Visa remains a solid investment with a predictable growth trajectory. Analysts expect Visa to maintain low double-digit growth rates through 2027. If Visa achieves an EPS of $14.24 in 2027, the stock could be priced between $356 and $427 (Assuming 25 to 30 PE Ratio), offering significant returns from the current price.

My Investment Position

I have been actively buying Visa stock, adding 11 shares at $255.22, making Visa my second-largest position in my long-term dividend growth stock portfolio. Visa's scalable business model, high free cash flow, and consistent shareholder rewards make it a compelling addition to any portfolio.

Conclusion

Visa continues to demonstrate strong financial health and growth potential despite recent market volatility. The current dip presents a potential buying opportunity for long-term investors. As always, do your own research before making investment decisions.

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THE NEWS

Tesla Stock Crashes 12% After Q2 Earnings, GOOGL Stock Sinks 5%

1. Tesla Q2 2024 Earnings Deck (Tesla Investor Relations)

2. Google Q2 2024 Earnings Results (Alphabet Investor Relations)

3. AT&T Stock Up 5% After Reporting Q2 2024 Earnings (AT&T Investor Relations)

4. Coca-Cola Up 1.5% After Q2 Earnings (KO Investor Relations)

5. NextEra Energy stock up 4.5% After Q2 2024 Earnings (NEE Investor Relations)

6. Update on the FBI Investigation of the Attempted Assassination of Former President Donald Trump (FBI)

NOTABLE DIVIDEND INCREASES

Bank Of America, Wells Fargo, Cintas, etc

• $WFC - Wells Fargo declares $0.40/share quarterly dividend, 14.3% increase from prior dividend of $0.35

• $CTAS - Cintas Corporation declares $1.56/share quarterly dividend, 15.6% increase from prior dividend of $1.35.

• $BAC - Bank of America declares $0.26/share quarterly dividend, 8.3% increase from prior dividend of $0.24.

• $PAG - Penske Automotive declares $1.07/share quarterly dividend, 11.5% increase from prior dividend of $0.96.

Source: Dividend Data

Thanks for the read! Let me know what you thought by replying back to this email.

— Zach

Disclaimer: Dividend Dividend Weekly (Dividend Data) is not a professional financial service. All materials released from Dividend Data Weekly (Dividend Data) are for educational and entertainment purposes. Dividend Data Weekly (Dividend Data) is not a replacement for a professional's opinion. Contributors to the Dividend Data Weekly (Dividend Data) might have equities mentioned in the newsletter