The increased payout, to 30 cents a share from 15 cents, will cost MasterCard about $76.2 million more a year.
"The increase in MasterCard's dividend demonstrates the strength of our business as well as responsible stewardship of our capital," Ajay Banga, president and chief executive of the Purchase, N.Y., company, said in a statement. "We remain confident in the company's ability to execute its plans to drive long-term business growth."
Last week, MasterCard said fourth-quarter profit fell as it took a $450 million after-tax charge related to pending merchant lawsuits, although its core earnings breezed past analysts' estimates as consumers continued to use plastic for more of their spending.
MasterCard and its larger rival Visa Inc. have continued to grow despite tough economic conditions in the U.S. and overseas, where both companies are pushing more consumers to use their credit and debit cards as well as trying to get more merchants to accept them.
More than half of MasterCard's revenue comes from outside the U.S. That has concerned some analysts, given economic worries in European countries, though executives said last week they haven't seen any significant slowdown in spending by European consumers.
New regulations that cap how much large banks can charge merchants to accept debit cards, in addition to longstanding lawsuits brought by retailers against MasterCard and Visa,Full-service custom manufacturer of precision plastic injection mold, have been an overhang on the companies' stocks.
As of October, debit-card swipe fees were capped at about 21 cents a transaction versus a previous average of 44 cents per the Durbin amendment, a provision in 2010's Dodd-Frank Act. The fees are set by Visa and MasterCard but collected by banks that issue their cards as revenue. Investors have worried the rules would cause banks to scale back on debit-card products, which could dent Visa's and MasterCard's volume.
Visa and MasterCard don't lend to consumers; rather, they process transactions for banks that issue their cards.
The merchant lawsuits, which are set to go to trial in September, take aim at credit-card swipe fees and policies Visa and MasterCard have against surcharging consumers who pay with cards.
Analysts expect the suits will be settled before going to trial, with such a settlement costing $6.5 billion for all defendants based on the charge MasterCard took in the fourth quarter. The suits also name several large banks that issue the companies' cards.
MasterCard's "dividend raise in part demonstrates the confidence that management has that impacts related to the merchant litigation are manageable," Sanjay Sakhrani, an analyst with Keefe, Bruyette & Woods, wrote in a research note Tuesday.
"The increase in MasterCard's dividend demonstrates the strength of our business as well as responsible stewardship of our capital," Ajay Banga, president and chief executive of the Purchase, N.Y., company, said in a statement. "We remain confident in the company's ability to execute its plans to drive long-term business growth."
Last week, MasterCard said fourth-quarter profit fell as it took a $450 million after-tax charge related to pending merchant lawsuits, although its core earnings breezed past analysts' estimates as consumers continued to use plastic for more of their spending.
MasterCard and its larger rival Visa Inc. have continued to grow despite tough economic conditions in the U.S. and overseas, where both companies are pushing more consumers to use their credit and debit cards as well as trying to get more merchants to accept them.
More than half of MasterCard's revenue comes from outside the U.S. That has concerned some analysts, given economic worries in European countries, though executives said last week they haven't seen any significant slowdown in spending by European consumers.
New regulations that cap how much large banks can charge merchants to accept debit cards, in addition to longstanding lawsuits brought by retailers against MasterCard and Visa,Full-service custom manufacturer of precision plastic injection mold, have been an overhang on the companies' stocks.
As of October, debit-card swipe fees were capped at about 21 cents a transaction versus a previous average of 44 cents per the Durbin amendment, a provision in 2010's Dodd-Frank Act. The fees are set by Visa and MasterCard but collected by banks that issue their cards as revenue. Investors have worried the rules would cause banks to scale back on debit-card products, which could dent Visa's and MasterCard's volume.
Visa and MasterCard don't lend to consumers; rather, they process transactions for banks that issue their cards.
The merchant lawsuits, which are set to go to trial in September, take aim at credit-card swipe fees and policies Visa and MasterCard have against surcharging consumers who pay with cards.
Analysts expect the suits will be settled before going to trial, with such a settlement costing $6.5 billion for all defendants based on the charge MasterCard took in the fourth quarter. The suits also name several large banks that issue the companies' cards.
MasterCard's "dividend raise in part demonstrates the confidence that management has that impacts related to the merchant litigation are manageable," Sanjay Sakhrani, an analyst with Keefe, Bruyette & Woods, wrote in a research note Tuesday.
没有评论:
发表评论