Credit card company Visa (NYSE:V) released its quarterly earnings report on Thursday. Net revenue of $7.9 billion for the period ending Dec. 31, 2022 was up 12% from the prior-year period. On a constant-dollar basis (i.e. excluding the impact of foreign exchange), The growth rate would have been 15%. Net income of $4.2 billion also rose by 6% during the period. On per-share basis, its adjusted earnings of $2.18 came in well above analyst estimates of $2.01. The company says it benefitted from "stable payments volume" and a resurgence in cross-border travel, which led to a strong quarter for the business. And those are trends that aren't likely to subside anytime soon as things return to normal.
Visa's business may continue to do well even if a recession hits this year as it could mean more cash-strapped consumers dipping into credit to pay for their purchases. That's one of the reasons this may be a top stock to own this year. Shares of Visa have been off to a strong start to the year and are up around 8% since the beginning of January – that's better than the S&P 500's gains of 6% thus far.
Trading at a multiple of 32 times earnings, Visa isn't a terribly cheap buy but it is trading below the 36 times earnings it has averaged over the past five years. With a strong profit margin of more than 50%, Visa's business has plenty of room to withstand inflationary pressures and economic headwinds this year.
For long-term investors, this is an easy stock to justify holding as Visa's business is likely to grow along with the economy.
