Visa stock is up 8% over the year and 23% over the past 12 months. If you had bought and held Visa stock five years ago, you'd be on the …
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This story originally appeared on MarketBeat
Visa (NYSE: V) Is quickly gaining a reputation as a classic buy-on-the-dip share. The payment technology company, best known for its credit cards of the same name, is up 8% over the year and over 23% over the past 12 months.
But that doesn't tell the whole story. If you had bought and held Visa stock five years ago, you'd be sitting on a profit of over 200%. And that doesn't take that into account Company dividend that has increased in each of those five years. That means your total return was even higher.
But what does the future hold for Visa as the card is now near its all-time high in early July? I see it as several bullish catalysts that should turn any dip into a buying opportunity.
Handicrafts with fintech
Earlier this year, Visa’s attempt to acquire Plaid, the US open banking platform, was blocked by regulators over concerns that the company might hold a monopoly on digital debit cards. Undeterred, Visa recently acquired Tink, a Europe-based open banking platform. The acquisition of Tink will provide Visa with an additional source of income.
As the pandemic has made very clear, there are millions of individuals who now conduct a significant part, if not all, of their banking operations through channels other than traditional banking. This will be facilitated by the growth of financial technology (i.e. fintech) solutions, which are being made available to businesses such as PayPal (NASDAQ: PYPL) operate like a traditional bank. This is especially true for small businesses and participants in the gig economy.
Consumers have money (and credit) to spend
A year ago, Americans were all juiced up and had nowhere to go. Direct stimulus payments to millions of Americans combined with a lack of entertainment options put many Americans into austerity mode. And that included paying for credit card balances.
This meant that when the economy finally reopened, there was a significant amount of dry powder on the sidelines. And in the world of e-commerce, Visa is accepted and welcomed. The company's first quarter results showed an increase in both payment volume and the number of transactions processed.
That number should only increase as more states relaxed Covid-19 restrictions. Latecomers are currently cross-border payments. Given the uneven international rollout of the vaccine and mounting concerns about the Delta variant, this could remain an obstacle to the company's growth.
However, total sales (and earnings) should continue to build on the strong first quarter numbers. And probably with the company Swipe fees increase in 2022that offers even more growth opportunities.
At the forefront of crypto payments
Visa has been accepting crypto payments for a while. However, the company recently announced that over $ 1 billion in cryptocurrencies had been purchased through the company's crypto-linked cards in cash or checks in the first six months of 2021.
One of the ways Visa supports this growth is by enabling consumers to transact in USD coin (CCC: USDC). This is a so-called stable coin that is powered by the powered Ethereum (CCC: ETH) Blockchain.
And this makes cryptocurrency transactions easier by eliminating the need to convert cryptocurrency to fiat money. Visa plans to expand its range of stable coins over the next few years. This is welcome news for traditional banks trying to introduce their own digital currencies. And that means Visa is probably the number one priority to get this deal.
Visa is currently working with Circle, BlockFi, and. together Coin Base (NASDAQ: COIN) to facilitate cryptocurrency transactions with more than 70 million merchants worldwide.
Buy the dip and enjoy the ride
The V Share forms a bullish ascending pattern with higher highs and higher lows. With both support and resistance mounting, it's not unrealistic for the stock to hit $ 260, a gain of over 10% from the stock's current level.
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