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Key Points

• The financials sector has lagged the S&P 500 this year, but two payment processing giants continue to deliver the kind of margins and earnings consistency that define long-term holdings.
• Despite recent sector-wide struggles, Visa and Mastercard function as a veritable duopoly, controlling over 90% of payments outside of China.
• Visa hasn't missed on earnings in 10 years, while Mastercard has secured 21 consecutive quarterly beats.
• Special Report: Did you see what Trump hinted at? (From American Alternative)

 

After finishing the past two years with an average annual gain of nearly 23%, the financials sector has struggled this year. With a year-to-date loss of around 9%, the cohort ranks last among the S&P 500’s 11 sectors. 

But zooming out, the companies that call the sector home have proven to be key components of buy-and-hold investors’ portfolios. 

With high-quality growth stocks increasingly difficult to identify in the market, two legacy companies operating in the global payment processing and digital payment markets continue to produce profit margins that qualify them as forever stocks.

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Why Digital Payment and Payment Processors Make for Good Forever Stocks

These companies have historically enjoyed higher profit margins than other industries afford due to their high-volume demand, ease of automation, and technology-driven business models that translate into low marginal costs per transaction. 

The industry is also poised for strong growth. According to industry analytics firm Grand View Research, the global payment processing solutions market, valued at nearly $48 billion in 2022, is projected to undergo a compound annual growth rate (CAGR) of 14.5% through 2030, reaching nearly $140 billion by the start of the next decade. Grand View also forecasts that the digital payment market, valued at more than $114 billion in 2024, will undergo a CAGR of 21.4% through 2030, reaching more than $361 billion.

While that degree of growth coupled with attractive gross margins could suggest the space is crowded, two of the biggest names in the industry continue to operate in a veritable duopoly, controlling over 90% of credit card and digital payments processed outside of China. With roots dating back to the mid-1900s, these companies control the digital payment and payment processing infrastructure, allowing them to dictate fees, limit competition, and maintain strikingly strong margins.

Despite companies including Block (NYSE: XYZ), with its peer-to-peer payment service Cash App, and PayPal (NASDAQ: PYPL), with its popular platform Venmo, looking to serve as disruptors, when it comes to forever stocks, none fit the bill better than the following two. 

Mastercard: The $450 Billion Market Cap Company Focusing on Tech Integration

Since Michael Miebach took the reins at Mastercard (NYSE: MA) in 2021, the company’s management has maintained a focus on expanding its tech platforms, supporting cross-border commerce, and developing services that help clients reduce fraud, streamline payment flows and leverage payments data for insights. 

In doing so, Mastercard achieved record revenue and net income (a.k.a. profit) in 2025. Revenue of nearly $33 billion denoted a year-over-year (YOY) increase of more than 16%, while net income of nearly $15 billion was also good for a more than 16% YOY increase.

That profitability was driven, in large part, by a 100% gross margin throughout 2025, made possible by tech integrations and a minimal cost of goods sold, resulting in the company’s quarterly gross profit consistently matching its quarterly net revenue.

For investors, that has translated into rewarding earnings per share. The last time Mastercard missed on earnings was Q3 2020 following the onset of the COVID-19 pandemic. Since then, the company has strung together 21 consecutive quarterly earnings beats. 

Most recently, the company reported Q4 2025 EPS of $4.76, marking a nearly 25% year-over-year (YOY) increase over the same quarter a year prior. Mastercard's earnings are expected to grow nearly 17% in the year ahead, from $15.91 to $18.61 per share.

At the same time, the company has been embracing trends in the broader fintech industry. Mastercard has recently shifted from a traditional payment network to an AI-driven, software-focused enterprise that focuses on enhanced security, simplified B2B transactions with virtual cards, and agentic AI tools. 

Icing the cake, Mastercard pays a dividend that while not known for its substantial yield (currently 0.69%) has increased for 13 consecutive years. The payment processing firm maintains a sustainable dividend payout ratio of 21.07%, and its annualized five-year dividend growth rate stands at 13.70%. 

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Visa: Evolving and Adapting Since 1958

Visa (NYSE: V) features a network-based model that enables partnering banks and other financial institutions to issue branded payment products while Visa focuses on infrastructure, standards, and technology integration. 

Like Mastercard, the company is rapidly integrating fintech, focusing on AI-driven solutions and blockchain-based settlement, with the goal of transitioning from its traditional card-based transactions to more flexible, digital-first experiences by 2026.

That resulted in Visa also reporting record revenue and net income in 2025, with the former coming in at $40 billion—good for an 11% YOY increase—and the latter registering nearly $20 billion.

While Mastercard’s run of earnings beats is impressive, Visa has not missed on earnings once in the past 10 years. During that stretch, the company has met analyst expectations twice while beating EPS expectations 38 times. 

Much of that can be attributed to the company’s nearly 83% gross profit margin in 2025, which falls in line with its 10-year average.

Like its counterpart, Visa also pays a modest dividend that currently yields 0.87%. And like Mastercard, its dividend payout ratio is a healthy 25.14% while its annualized five-year dividend growth rate stands at 14.48%. The company has increased its payout for 17 consecutive years.  

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