Visa (NYSE:V) dominates the payment stocks’ arena. The colossus size and robust performance make it a stalwart in the industry. With Visa’s stock surging over 90% in the past five years and the digital payment landscape snowballing at a compound annual growth rate of approximately 17% through 2031, few would dare to discount Visa. However, for investors who seek the thrill of the hunt and yearn for the prospect of unearthing the next big thing, alternative payment stocks are gaining attention. In this domain, risk and reward are the name of the game.
Square, Inc. Now Block (SQ)
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Block (NYSE:SQ) is a compelling candidate among the payment stocks, perhaps a contender for the next Visa crown. The story behind the company’s conception revolves around empowering small businesses unable to accept credit cards. However, while Block’s narrative is compelling, its journey hasn’t been without twists and turns. Despite a resilient rally of nearly 20% in the last three months, SQ stock is laboring under a 12% dip over the past 52 weeks. Yet, the company isn’t devoid of merit, recently posting its third consecutive profitable quarter with a 21% year-over-year profit surge. This displays potential, and analysts are projecting close to 20% growth in the SQ stock price over the next year. Notably, Block also exhibits momentum in the trailblazing realm of cryptocurrencies, a momentum that PayPal seems to lack.
Capital One Financial (COF)
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Capital One Financial (NYSE:COF) is shaping up to be more than just a competitor amidst the payment stocks’ milieu. It embraces a banking component with over 700 U.S. retail banking locations, including 51 cafe establishments, and garners 54% of its revenue from commercial or consumer loans. Beyond the payments domain, COF stock has delivered a 60% return in the last five years, boasting a dividend yield of over 1.75%, more than double that of Visa.
SoFi Technologies (SOFI)
Source: SoFi.com
As for SoFi Technologies (NASDAQ:SOFI), the markers of growth are evident. The company’s evolution into a full-fledged banking institution is noteworthy. Its payment processing service, Galileo, continues to exhibit robust double-digit customer growth year-over-year. However, the path to prosperity for SOFI stock has been fraught with challenges, struggling to sustain momentum despite entering the realm of profitability in the last quarter. While the company foresees a staggering 242% earnings growth in the next 12 months, skeptics cast doubt, offering only a conservative 13% upside for the stock. It seems the market is biding its time, awaiting SoFi’s triumph in a landscape where interest rates are likely to remain elevated for the foreseeable future.
On the date of publication, the opinions expressed in this article are those of the writer. The writer has been covering the market for over five years and has been writing for InvestorPlace since 2019.
