With third-quarter earnings season heating up, payment giants Visa V), Mastercard MA), and American Express AXP) are drawing investor attention as consumer spending, international travel, and digital transactions continue to drive growth across the global payments market.
Visa and Mastercard dominate the U.S. credit card network market, while American Express has carved out a lucrative niche serving affluent consumers and businesses through its premium card offerings.
Although all three benefit from the long-term shift toward cashless payments, their business models, earnings growth prospects, and valuations offer investors different opportunities.
After American Express's recent Q3 earnings beat, Visa and Mastercard are set to release their quarterly results this week, making this an ideal time to compare these financial services leaders.
American Express’s Strong Q3 Report
Last Friday, American Express reported Q3 adjusted earnings of $4.68 per share, surpassing the Zacks Consensus Estimate by nearly 5% and increasing 13% year over year. Quarterly revenue climbed 9% to a record $20.06 billion, although this narrowly missed expectations of $20.13 billion.
The encouraging performance was supported by stronger cardmember spending, rising net interest income, and healthy growth in card fees. T otal spending on American Express cards increased 8% to $454 billion, reflecting continued demand and resilient spending among its affluent customer base.
Adding to the positive outlook, American Express raised its full-year adjusted EPS guidance to $17.60-$17.90 per share, representing 15% YoY growth at the midpoint, while maintaining expectations for 10% annual revenue growth.
However, unlike Visa and Mastercard, which primarily operate payment networks, American Express issues credit cards and lends directly to consumers, making it more susceptible to rising delinquencies and credit losses during economic downturns.
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Visa & Mastercard: Strong Earnings Growth Expected
Visa is scheduled to report results for its fiscal fourth quarter on Tuesday, October 27, after the market closes.
The Zacks Consensus Estimate calls for Q4 EPS of $3.43, representing 15% YoY growth (Current Qtr below). Quarterly revenue is projected to increase nearly 13% to $12.08 billion, supported by higher payment volumes, cross-border transactions, and expanding digital commerce.
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Meanwhile, Mastercard will report its third-quarter results on Thursday, October 29, before the opening bell.
Mastercard's Q3 earnings are projected to climb 17% to $5.14 per share (Current Qtr below), with revenue expected to rise 12% to $9.63 billion.
Both companies benefit from highly profitable payment networks that generate transaction-based revenue without the significant consumer lending exposure associated with American Express.
Furthermore, Mastercard's expanding value-added services, including cybersecurity, fraud prevention, and data analytics, provide additional opportunities to diversify revenue and sustain long-term earnings growth.
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Recent Performance & Valuation Comparison
Visa has demonstrated the strongest stock performance in 2026, gaining 15% year-to-date, compared with Mastercard's 7% advance. In contrast, American Express stock has declined roughly 15% YTD, despite continued growth in its premium card business.
That said, over the last three years, American Express has been the strongest performer, surging 120% and outperforming the benchmark S&P 500's 90% gain, while Visa and Mastercard have trailed the broader market despite posting respectable returns of 75% and 68%, respectively.
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From a valuation standpoint, American Express trades at a considerable discount to its two competitors, reflecting its more credit-sensitive business model. AXP trades at 17X forward earnings, also representing a noticeable discount to the S&P 500's 21X.
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In comparison, Visa and Mastercard command premiums of 27X and 31X forward earnings, respectively, reflecting their asset-light operations and stronger profitability.
While American Express offers the more attractive valuation, Mastercard's higher projected earnings growth and Visa's dominant global payment network help justify their premium multiples.
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Dividend Comparison: AXP Offers the Highest Yield
All three companies reward shareholders with quarterly dividends, although American Express offers the most attractive income opportunity.
AXP currently yields approximately 1.21%, compared with Visa's 0.66% and Mastercard's 0.56%.
Despite their relatively modest yields, all three have demonstrated a commitment to increasing shareholder payouts. With dividend payout ratios below 23%, each company has ample room for continued dividend increases as earnings expand.
American Express is the preferred choice for investors prioritizing current dividend income, while Visa and Mastercard offer attractive long-term dividend growth potential supported by their cash-generating business models.
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Bottom Line
Visa, Mastercard, and American Express remain compelling long-term investment opportunities as digital payments and global transaction volumes continue expanding.
American Express offers the most attractive valuation and dividend yield, while Visa benefits from its dominant payment network and stronger recent stock performance. However, Mastercard may offer the best combination of earnings growth, business quality, and long-term upside potential, particularly as its Q3 results approach.
Reflecting this favorable outlook, Mastercard stock currently sports a Zacks Rank #2 (Buy), while Visa and American Express both carry a Zacks Rank #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).