Bears believe Visa stock price has downside risk ahead-considering negative revenue growth outlook. However, fundamentals for international traveling and tourism have started improving since Pfizer announced to supply more than a billion doses next year.
The downside risk is high
Visa stock price rally is mostly brought in by the unprecedented broader market recovery from March pandemic lows. Meanwhile, the share price rally is lacking support from financial numbers. Its September quarter net revenues fell 17% year over year while earnings per share also saw a double-digit decline. The company blamed international traveling restrictions for negative financial growth, which is likely to take sometime before recovering to the pre-pandemic level. On the other hand, the company has been seeking to capitalize on consumer’s shift towards online platforms and cash digitalization.
Dividends are a bright spot
Visa is among the companies with established dividend growth history. The company has raised dividends in the past 12 straight years. Despite pandemic and negative revenue growth, Visa has raised the quarterly dividend by 6.7% last month. Its strong cash position is helping it in sustaining the dividend growth. The company ended the third quarter with $20 billion in cash, cash equivalents, and investment securities. Moreover, the company is optimistic about growth opportunities amid the world’s move to digital payments.
