Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
MA· Financial Services
Mastercard
Mastercard is a toll booth on the world's spending with a 59 percent operating margin, but you pay a king's ransom at 28 times earnings.
Buffett fit
Strong fit
Owner
100
Durability
100
Management
74
Price
27
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Mastercard I would be delighted with the machine and unhappy with the entry price.
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The durability here is about as sturdy as anything in finance. The network effect is the , every merchant accepts the card because every consumer carries it, and every consumer carries it because every merchant accepts it, a circle that took decades to draw and would take decades to erase.
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Management has been a sensible steward of the owners' money, shrinking the share count by 2.4 percent a year so each remaining share owns a larger piece of a growing pie.
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Here is where I step back. The yield is only 3.9 percent and the trailing earnings yield 3.6 percent, which is what you get when you pay 27.9 times earnings for even a wonderful company.
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- The full reasoning behind all four pillars
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 59.4 percent and of 82.9 percent show a toll network that keeps most of every dollar it collects.
- 2 of 51.9 percent trailing, with a 49.5 percent five year figure, proves the economics are durable and not a one year fluke.
- 3Revenue at 14.8 percent and earnings per share at 17.1 percent a year reflect a that grows with global spending.
- 4 runs at 113 percent of net income, so reported profit turns into real, spendable cash.
Concerns
7- 1Valuation is the problem, a price to earnings ratio of 27.9 and an EV to of 22.8 leave little room for error.
- 2The yield is just 3.9 percent, thinner than a long government bond and offering no .
- 3The earnings yield of 3.6 percent means you are buying tomorrow's growth today and paying full freight for it.
- 4A current ratio of 0.98 sits just below one, so short term assets do not quite cover short term bills.
Price history
$623+73.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Mastercard runs a payment network that takes a tiny slice of nearly every swipe, tap, and click that crosses its rails, and it does so without lending a dime or carrying the credit risk. The economics are about as good as commerce allows, with an 82.9 percent and a 59.4 percent , because once the network exists each extra transaction costs almost nothing to carry. Revenue has compounded at 14.8 percent a year and earnings per share at 17.1 percent, so the toll keeps rising with the tide of global spending.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Financial Services
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