Americans nevertheless spent despite high inflation and decreasing epidemic savings. Consumers went on a spending spree as incomes rose and jobs were added. The Commerce Department reported a 0.8% increase in consumer outlays in February, the biggest since January 2023. Consumer expenditure rose 0.2% in January, demonstrating the economy's resiliency.
After harsh winter weather kept Americans indoors, retail sales improved in February. Consumer optimism about current and future economic circumstances improved. In March, the University of Michigan consumer mood index reached 79.4, the highest since July 2021.
With consumers feeling confident about their health, spending is certain to rise. With consumer spending rising, payment processors like American Express Company AXP, Visa Inc. V, and Mastercard Incorporated MA will benefit.
These merchant-consumer financial transaction enterprises benefit from rising expenditure. This requires smart investors to monitor them. Financial services organization American Express offers credit cards. American Express has increased revenues through strategic collaborations, cost reduction, and product upgrades to attract customers.
American Express has strong capital and generates cash. The corporation ended the fourth quarter with $47 billion in cash and cash equivalents. The company can handle negative risks. American Express has consistently paid dividends, indicating a solid business plan. Over the past five years, AXP has raised its dividend four times and payed 9.7%. American Express pays 1.05% dividends. View American Express' dividend history.
American Express's net profit margin of 13.8%, which is greater than 10%, shows that it has controlled operational costs and generated adequate sales. Over the past 60 days, its Zacks Consensus Estimate for current-year earnings rose 0.2%. AXP expects 14.5% earnings increase this year. Zacks Rank #2 (Buy) applies to the company.
Visa provides payments technology worldwide, including in the US. Successful acquisitions and long-term collaborations increased Visa's top line. Sales increased as business volume and completed transactions increased, while technology developments reinforced the company's financial situation.
Visa has plenty of cash and keeps paying dividends. Within five years, V has raised its dividend five times and increased its payment 15.7%. Visa pays 0.75% dividends. View Visa's dividend history. Visa has a great 53.9% net profit margin. Over the previous 90 days, the Zacks Consensus Estimate for current-quarter earnings rose 2.5%. Visa expects 12.8% earnings increase this year. The company is #3 (Hold) on Zacks.
Mastercard offers global payments. Mastercard's acquisitions enlarged its market, while technical upgrades and core product improvements drove revenue. Solid fundamentals and an ability to produce ongoing cash inflows position Mastercard to service its debt. Mastercard also pays steady dividends. MA has raised its dividend five times and 13.9% in five years. Mastercard pays 0.55% dividends. View Mastercard's dividend history.
Mastercard's 44.6% net profit margin is promising. Over the past 60 days, its Zacks Consensus Estimate for current-year earnings rose 0.1%. Mastercard expects 17.1% earnings increase this year. It has a #3 Zacks Rank.
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