Mastercard declares third quarter dividend

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MasterCard (NYSE: MA) declared a cash dividend of $ 0.40 per share for the third quarter, maintaining the same payment it had for the previous three quarters.

The payment processor has an annual payout of $ 1.60 per share at a yield of just 0.49%. It has a payout rate of around 24%. Mastercard has increased its dividend every year for the past nine consecutive years. Over the past five years, it has recorded a compound annual growth rate of around 24%.

The cash dividend will be paid to shareholders on November 9.

Mastercard pays a higher dividend than its main rival Visa, which pays $ 0.30 per share per quarter. American Express pays a quarterly dividend of $ 0.43 per share.

Mastercard has just completed a second trimester when net sales decreased by 19% to $ 3.3 billion, year over year, and net income fell 31% to $ 1.4 billion due to the reduction in consumer spending caused by the pandemic of COVID-19. The company saw a 10% drop in gross dollar volume in the quarter, while cross-border volume fell 45% and switched transactions fell 10%.

Image source: Getty Images.

However, the credit card company reports modest improvements in its key operating metrics through August, as most markets are in the “normalization phase” when social distancing and mobility limitations are relaxed and spending begins to pick up.

Growth rates in switched volumes – excluding travel and entertainment – have returned to levels they were before the pandemic. Switched volume refers to the authorization, clearing and settlement of a transaction, which incurs a fee. The company notes that there has also been an improvement in the volume of travel and entertainment switching.

Growth in cross-border volumes, which is a transaction in which the two parties are in different countries, also improved slightly.

Mastercard’s stock price traded slightly higher on Tuesday and is up about 10% year-to-date.

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