After the closing bell on Thursday, Visa (V) released its first quarter financial results. Here’s what the report means for mutual fund investors.
Inside V’s Earnings
Earnings
The credit card company reported net income of $1.57 billion, or $2.53 per share, up from $1.41 billion, or $2.20 per share, last year. Analysts expected to see EPS of $2.49.
Revenue
Revenue rose to $3.38 billion from $3.16 billion a year ago. Analysts expected to see revenue $3.34 billion.
Outlook
Visa reaffirmed its 2015 revenue growth outlook of growth in low double digits.
Stock Split
Visa also announced a 4-for-1 stock split.
High Valuation
Share prices will soon be more affordable for investors following the 4-for-1 stock split, but that will not change the stock’s high valuation. Visa is currently trading at about 26x 2015 earnings estimates, which may be a bit rich for investors. Visa’s dividend yield remains under 1%, so investors buying shares will be counting on its share price to continue at its current pace.
Mutual Funds to Watch
Investors interested in Visa may be interested in the funds listed below. These funds currently have the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 1.34% |
| FCNTX | Fidelity® Contrafund® | 1.10% |
| VFINX | Vanguard 500 Index | 0.86% |
The Bottom Line
The funds listed above allow investors to gain exposure to Visa while remaining diversified. Investors interested in Visa may also be interested in Mastercard (MA) and Discover (DFS).