Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Thematic (Sector/Industry)

Malaysia Financials / Thematic (Sector/Industry)

We think economic moats remain the strongest at the center of the payment ecosystem, where <a href="https://www.smartkarma.com/entities/8707" target="_blank" data-smartkarma-citation="entities:8707:1">Visa Inc (V US)</a> and <a href="https://www.smartkarma.com/entities/15529" target="_blank" data-smartkarma-citation="entities:15529:1">Mastercard Inc (MA US)</a> maintain massive networks of banks working on their behalf to add consumers and merchants. The role these companies play in setting standards is becoming more important as payment options proliferate. On the other hand, card issuers are competing heavily for spending volume, merchants are taking back control of loyalty and rewards, and software is replacing hardware at the point of sale. This leaves issuers like <a href="https://www.smartkarma.com/entities/916" target="_blank" data-smartkarma-citation="entities:916:1">American Express Co (AXP US)</a> and hardware providers like <a href="https://www.smartkarma.com/entities/11808" target="_blank" data-smartkarma-citation="entities:11808:1">Verifone Systems Inc (PAY US)</a> in a difficult position. American Express' strong corporate business, its reputation for superior customer service, and its direct connections to merchants and cardholders give the wide-moat firm time to adapt.We separate our payment coverage into three categories. The growth leaders, Visa and Mastercard, possess immense competitive advantages and should experience volume growth and increasing profits for years to come. The change navigators, encompassing most of our narrow-moat payment coverage along with American Express, are adapting to an evolving competitive environment, require closer monitoring over time, and are worth lower multiples. The value traps—Verifone and <a href="https://www.smartkarma.com/entities/23755" target="_blank" data-smartkarma-citation="entities:23755:1">Square Inc (SQ US)</a>—are closely tied to the declining hardware industry and could be dangerous for long-term investors.Analyst: Jim Sinegal

We think economic moats remain the strongest at the center of the payment ecosystem, where Visa Inc (V US) and Mastercard Inc (MA US) maintain massive networks of banks working on their behalf to add consumers and merchants. The role these companies play in setting standards is becoming more important as payment options proliferate. On the other hand, card issuers are competing heavily for spending volume, merchants are taking back control of loyalty and rewards, and software is replacing hardware at the point of sale. This leaves issuers like American Express Co (AXP US) and hardware providers like Verifone Systems Inc (PAY US) in a difficult position. American Express' strong corporate business, its reputation for superior customer service, and its direct connections to merchants and cardholders give the wide-moat firm time to adapt.We separate our payment coverage into three categories. The growth leaders, Visa and Mastercard, possess immense competitive advantages and should experience volume growth and increasing profits for years to come. The change navigators, encompassing most of our narrow-moat payment coverage along with American Express, are adapting to an evolving competitive environment, require closer monitoring over time, and are worth lower multiples. The value traps—Verifone and Square Inc (SQ US)—are closely tied to the declining hardware industry and could be dangerous for long-term investors.Analyst: Jim Sinegal

Sumitomo Mitsui Financial Group (8316 JP)

Mitsubishi UFJ Financial (MUFG) (8306 JP)

Sumitomo Mitsui Financial Group (Sponsored Adr) (SMFG US)

Sumitomo Mitsui Financial Group (Sponsored Adr)

Shanghai Pudong Development Bank Co. (600000 CH)

Taiwan Semiconductor (TSMC) - ADR (TSM US)

Mitsubishi UFJ Financial (MUFG) ADR (MUFG US)

Samsung Electronics Pref Shares (005935 KS)

Battle Lines in Payments: An Evaluation of the War for Wallets