 Welcome to the channel. This is reliable Rudy and this video will be filling a viewer request for a visa But before we get into the video, I'm not always since financial advisor everything this video contains only my opinion And it's for entertainment purposes only I do not have an individual holding a visa But I probably own it in one of my index funds So keep that in mind, but at the end of the day, I'm going to get my unbiased opinion on the company So going into the video Market cap 370 billion revenue 29 billion net income almost 15 billion So just looking at that alone very good margins current P of almost 25 five-year average of 30 So kind of right in line right there Profit margins 51% Outstanding right in line with their five-year profit margins very very nice and gross margins of 80% price of sales 660 now this is Probably on the higher side, but with these margins you're it's reasonable to have a higher price of sales But still 1260 is probably a little bit high a year-to-date free cash flow 16 billion Kind of in line with their five-year average nice growth right there five-year average of 12 and a half roughly they have a point 8% Dividend dividends paid at 3.11 billion dividends paid so taking that out of their year-to-date free cash flow That's probably right around that 18 to 20 percent of their free cash flow goes to that dividend so plenty of room for growth right there Return on assets very good return on equity very good They invest their money really good right in line with their five-year average on their invested capital Yeah, pretty solid metrics of a visa when you when you're dealing with companies that have Solid profit margins and gross margins like this normally it everything else kind of falls in line It's especially if they can consistently put up numbers like that and for the most part pretty Right in range with their five-year numbers so pretty good stuff there. So let's click on the eight pillars and yeah The companies like this where you see these two red X's it's just a matter of valuation normally But the end of the day long-term liabilities Divided by their five-year average free cash flow now that's going off of their five-year numbers right here If you're going off of their year-to-date free cash flow This is probably even lower But this is insinuating that they can pay off all their long-term liabilities in about two years and Then a solid growth everywhere else. So yeah like what I'm seeing So let's jump into the income statement and go look at the revenue Now this is on four quarters. We'll keep it there for a second. You can see I mean just consistent growth Now the COVID year a little bit of just a down on revenue, but right back on track in these last two years let's go check in on the Actually, let's look at the cost of good soul So you can see this increase right here and cost a good soul a little bit less than a billion, but their actual revenue grew by About three point seven or three point three billion roughly So really good revenue growth in my opinion. You can see the gross profit right here I just consistent growth all the way through that's what you want to see very nice Going over to the quarterly you can see their third quarter revenue Actually had a nice little decrease right here. I'm not sure when they reported these numbers But might be worth looking at something because this is going back to those COVID lows I'm not sure if they're lows. Let's click back real quick So you can see leading up to COVID pretty solid growth and this COVID year if we switch back over to This second quarter of 2020. This was their decrease, but then back to really solid revenue growth right there or operating revenue and Yeah, now This is something that I would want to look into because what what what was it that made them fall off of this course right here of this consistent revenue growth and Nothing really changed with the cost of good sold as a lot of companies their cost of good solds are going up with the Current economic state that we're in So something to look into right there, but the end of the day they're operating income This is the business what the business model itself is bringing in taking out other expenses Pretty solid growth still on the operating income. So I'm sure they had specially income charges. No, they didn't they didn't have specially income charges. There's There's probably something that's tying into why this revenue is down a little bit Net income they were still had very solid net income growth right there So in going off this net income to this revenue, this is more than This is right around that 60% margin. So that's very very good Let's go down to the shares. Oh, that's interesting Interesting. So buying back a lot of shares. Oh It's a little bit all over the place. So bought back a little stayed bought back bought back issued some shares So I'm sure the share price with that COVID year This is where that return on equity comes in they issued a ton of share I'm sure their share price was up quite a bit and then they bought back a ton of shares right there stayed flat now They issued some more shares right there. I'm sure they did a very good job of issuing When at a more of an elevated price, it's tough to say and then they haven't paid this dividend in this quarter But it looks like this dividend growth is there. So if we're looking at this dividend growth 2020 they paid a dollar 20 2021 they paid a dollar 28 and then 2021 into 2022 that increase in six cents is I mean we can go calculate that real quick Uh, so 0.32 is what they paid the previous year multiply that by four. So 128 now, let's do 0.38 times four divided by 128 This is insinuating the growth. So dividend growth of 18.75 percent That easily covers the current inflation that we're sitting at So even though the dividend is only 0.8 percent that dividend growth that you're getting for holding the shares Is covering that inflation. So that is what you want to see in any type of dividend company And also tying in the payout ratio of the company, which is roughly around that 20 percent So pretty solid, uh, in terms of looking at the dividend aspect of visa Um, so that's kind of what I wanted to look at right there. Let's look at the four quarters and look at these shares a little bit So, yeah at the end of the day, they they They've been consistently around this two billion over this two billion Now they're still at at 1.9 billion shares. So they're still consistently buying back shares. That's what you want to see Now you can see the dividend growth here was the 20 increase. This is roughly a six percent increase right there And now they go from a six percent increase to increase and they're dividend by 18 percent I would imagine that this dividend growth, especially with the 20 payout ratio that this is going to continue to grow Year in and year out because it's not taking much of their free cash flow if they can consistently put up that free cash flow I would expect this dividend to continue increasing So the next thing we want to talk about is the Long-term my abilities. Let's go to the balance sheet Plenty of cash on hand fifth and growing cash on hand and this is on a quarterly state. So Just looking at these last three quarters 12 billion 14 billion 15.7 billion. They're growing their cash Same with their turn their current assets growing growing assets, which we want to see Total assets 85 billion To go look at their long total liability. So a current ratio of About 1.8. So yeah, visa is not going under especially with those margins uh very solid current ratio And long-term my abilities 29 29 billion if we go back to the metrics tab Of free cash for year to date 16 billion you take 29 billion divided by 16 billion if they're able to continue that Year to date free cash let's insinuate and they can pay off their long-term debt in 1.8 years So very very solid right there. I would say Uh, yeah pretty solid. I think uh, I am actually going to dip into the stock analyzer tool here. So let's go pull up Stock analysis.com. We'll type in visa Go to financials and let's Determine what type of revenue growth we're going to look for right here Uh, switch it to a quarterly. So You can see that this little decline right here. Now. This doesn't have that third quarter We know that third quarter is going to decrease a little bit. So I might uh dip Be a little bit more conservative on those revenue Numbers, but let's also go to macro trends and pull this up visa So here's this revenue. They do not have that. Oh, they do have that third quarter right here Hmm. Why is it saying that they had seven point? Seven seven Yeah, I might have to look into that a little bit because if we go on this quarterly for this third quarter Okay, so it's taking this revenue right here, but they're operating revenue with the decline So I don't know how I feel about that But at the end of the day, they're they're actual revenue that they posted still had pretty solid growth right there so back over to the Pretty consistent right around that I like the high gross margin. So I think I am going to play that in factor that into this model a little bit So let's go over to the stock analyzer tool and Let's just go on the low side. We'll go six 10 14 I like that revenue growth now looking at their five year and 10 year numbers I might even tweak this down a little bit We'll go nine and 12 just to bake in a little bit more margin of safety profit margins really consistent right around that range But let's go look at the margins real quick. And you can see the gross margins Very solid gross margins operating margins for the last Nice shelf right here in the 60s a little bit of a decrease in 2016 But right back into these 60s. I really like that operating margins now looking at the net margins 2016 was definitely a funky year I'm sure they had some sort of acquisitions in there We'll go look at that before I finish this off But a good shelf right here in the low to higher 40s And then a nice shelf right here really consistent around here So I I would say it's pretty fair to assume right around this 50 percent net margins unless something drastically changes with the business So we'll go to these profit margins. We'll go 46 48 50 I feel that's more than reasonable probably a little bit on the lower side But as I as I always state it's always good to bake in as much margin of safety as you possibly can And we'll use these these same numbers for the free cash flow Now for a pe for a six percent revenue growth, I'm probably going to pay that 16 of 14 18 So we'll go 16 18 and 20 16 18 20 we want a 15 percent return for a 10 year analysis We're going to hit analyze There you go. Um, so yeah As I stated probably a little bit on the high on the higher side now If I wanted to tweak these numbers and I wanted to stay more condensed And this double digit growth because they're growing pretty solid And I'm sure that kovat here is probably tweaking into some of these five year and 10 year numbers That kovat here was a down here. We'll go 10 the 14 percent and we'll just leave this at a flat 50 percent across the board Now insinuating a 10 growth Probably going to pay 18 20 and 22 18 20 22 for a 15 percent return Okay, we're we're right in there now if we're looking at the stock price of visa Did it get down into these 180s? It sure did. So if you believe those high numbers, uh, Recently we were down into this buy range now just looking at this I haven't looked at anything charting related with visa But you can see we have a nice descending channel going down You can see boom Boom, I'm sure this this rejection right here is setting another low So you got a high a lower high a lower high a lower high and a lower high And it's already seen action right there if this Support is able to give out that is where you're looking for it I'm sure there's gaps on the way up right here that you're looking for at the fill Now this is in the one now the low for this kovat drop was down to 135 if I go back to my stock and Analyzer tool would I be interested in this stock if it got down to 135? Yes I would I would be very interested in that But um, nonetheless before I wrap this video up Let's go over to the chart and do a little bit of charting analysis on visa And as you can see I have a pretty clean chart. I have not looked at this chart But oh, yeah, this is this is what this is what I was talking about off of that first glance you can see Direct correlation with that you have multiple points of contact one two three four five six seven eight nine 10 10 points of contact now had it been able to push this You know it did have earnings that came in place right here But on that earnings day, let's zoom into this a little bit. You can see that we left this gap right here Let's mark that gap Then you see on today's trading day. We got damn close to this so that on this gap up It was the earnings day. Let's see what they did right in line with the numbers that analysts were expecting And Here we are. We're trying to get down to this gap Now do we have some sort of uptrend that we can go off of right here? We sure do Boom boom boom. This is actually the third point of contact that we're putting a wick into right here And they're getting ready to pay their dividend not a big dividend, but As I stated before that dividend is growing Uh, so let's switch this over to a month's chart and see if we have a long term uptrend that we can set You know, we have that downtrend And it looks like we do probably have an uptrend that we can place right in here But the interesting part about this Ah, yeah From the start of existence back in 08 You have this sell off right here And we are kind of passes down to our this uptrend Now I would want to look inside of this right here for any types of gap fills right here Now you can see on the month chart We do Gap up right here and when we are the lows that we almost set pretty much a double bottom It opens up the next month a little bit higher. We can see this wick goes to the same exact spot Let's mark that with a horizontal line right there and that comes down to 175 going back to my stock analyzer tool 175 in the middle of my middle and high assumptions right there It could have been a buying opportunity and maybe my numbers are a little bit conservative But at the end of the day, that is what I would have been looking for a little bit more. You can see That line that I had put we have a shaved green bottom right off of that line Holding that support and I had this support given out I probably would have expected a little bit of red engulfing to the downside But this is what I was more interested in right here. Let's go see some of the gaps that need to be filled We got a gap right there gap right there gap right there Now on the kovat drop Here was gap right there. This isn't the kovat drop. This was the kovat drop But a couple gaps that need to be filled but you can see this gap up right here Let's see if this ended up getting filled this got filled on the money So we gap up right here on an earnings day and then we came down one two Three just a simple abc structure down to this gap fill where we ended up staying bullish right there So yeah a couple gaps that need to be filled but look at where these gaps are at these gaps from 135 to 121 Let's go back over to my analysis right here That is right in the middle of my low and middle assumptions if a price is to get down there That is going to be very attractive to me um but in the in the short term I would expect You know can this uptrend hold And how is it going to act with this with this downtrend right here? You can see the one the 10 points of contact on this downtrend right here Now you can see when this this long term uptrend that I set right here You can see it holds twice and we gap down right below it now What happens when we extend back up we meet and start forming this downtrend right here And it actually taps the top or the bottom part of my long term uptrend How interesting is that guys? But nonetheless You know very solid company, but from a charting perspective I got to see it push this this downtrend before I'd be interested in it And I'm looking forward to if it does continue to get rejected. So let's take this short term uptrend out Now if this is able to get a pop from this uptrend And go and hit this downtrend again and set a double top that is going to be very bearish in terms of what I mean by double top is a lower high from this I'm expecting the price to continue going down now if you have a high lower high lower high lower high all the ways through this I'm going to expect lower lows all the ways through this now if it gives out this support right here The next thing I have marked on my chart Is 160 and I'm sure there's other gaps that need to be filled in there. I can see there is a gap right there And a gap right there. Let's go see if those were filled You can see the 170 never got filled the 167 never got filled 160 151 135 so where would I be interested? And potentially starting a position for visa You know my middle assumption is pretty pretty close to that 150 Going over to the chart. We got 150 one and a half. I'd say that's probably pretty justified right there 150 and a half And that's my take on visa now. I have my chart set up I'm looking for this support to eventually end up cracking and let's see it come down here and fill some of these gaps Where we're more interested in the stock price. I hope you enjoy the video And we'll see you on the next one