The 1 Stock I'd Buy Before American Express Right Now
Payment processors generate high margins largely because the fees they collect on transaction volume and frequency are so high. A cap between 10% and the more common 20%+ annual percentage rate would impact issuer margins -- like JPMorgan Chase and American Express -- but not Visa or Mastercard directly. However, it would indirectly impact these companies because their networks would shrink, and transaction volume and frequency would fall.
Visa is one of the best stocks to buy now
Visa is better positioned to handle economic uncertainty and industry policy changes than American Express. The recent sell-off makes its valuation very compelling.
American Express has a slightly higher dividend yield at 1% compared to 0.9% for Visa. Both companies regularly buy back stock and have drastically reduced their share counts over time -- which has accelerated earnings growth.
Visa is a high-margin cash cow of a business, with international exposure and a rock-solid balance sheet. It is the undisputed industry leader and is frequently cited as being the most accepted card brand worldwide, with the most credit and debit cards in circulation.
Companies as high quality as Visa rarely go on sale. But right now, investors can buy Visa at a multi-year low valuation.
All told, Visa is the kind of stock that will appeal to dividend, value, and growth stock investors alike, making it a foundational holding worthy of building a portfolio around in 2026.
Should you buy stock in Visa right now?
Before you buy stock in Visa, consider this:
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JPMorgan Chase is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase, Mastercard, and Visa. The Motley Fool has a disclosure policy.
The 1 Stock I'd Buy Before American Express Right Now was originally published by The Motley Fool
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