Callable Multi Barrier Reverse Convertible on Visa, Amex, Mastercard
Over the last 10 years, payment network providers have delivered a remarkably steady revenue compound annual growth rate of around 10%.
Going forward, we expect this positive trend to continue as digital payment solutions continue to take market share away from cash, partly due to their convenience and due to the structural shift towards electronic payments as life and work are increasingly going online. The corona crisis is only accelerating this trend, also due to health risk arguments associated with touching physical cash. Against this background, we remain constructive on digital payment providers. When it comes to single stocks, we have a Buy rating on three key players in this market: VISA, American Express and Mastercard. These firms are clear favourites by our Equity Research given their product innovation capabilities and wide merchant acceptability, which translates into a strong competitive positioning.
Investors looking for yield can consider the JB 1Y USD Multi Barrier Reverse Convertible on these three stocks in subscription. This quarterly callable product pays a coupon of 10.50% p.a. and comes with an attractive downside protection via a continously observed barrier of 55%.