MasterCard Gets Nod Over Visa From Guggenheim

NEW YORK (TheStreet) -- Guggenheim Securities analyst David Darst on Tuesday raised his earnings estimates for MasterCard (MA) , while saying the payment processer "has the potential for a higher long-term growth rate given smaller size and market share" than its industry rival, Visa (V) .

Both companies have outperformed the broad market year-to-date, and over the 52-week period through Monday, and Darst said that even though price-to-earnings multiples for both companies have expanded, "the stocks do not appear expensive as both continue to trade for ~0.9x the FY13E growth rate for each."

MasterCard's shares closed at $436.12 Monday, returning 17% year-to-date, with a 52-week total return of 59%.

In comparison, the S&P 500 Index (SPX.X) has returned 9% year-to-date, and 2% for the 52-week period, through Monday's close.

MasterCard last week reported a 25% increase in first-quarter earnings per share from a year earlier, to $5.36 a share, as net revenue rose 17% to $1.8 billion.

Darst on Monday raised his 2012 earnings estimate for MasterCard to $22.25 from $21.84, and his 2013 EPS estimate to $26.65 from $25.75," saying he expected "share repurchases to add 100-200bp to EPS growth."