Paypal (PYPL) stock doesn't get a lot of attention nowadays. Everyone is more interested in high flying stocks like Tesla or Apple. Paypal is like cute girl that didn't get asked to junior prom. With so many stocks trading all over the place, should you take a serious look at Paypal?
For me, Paypal is a slow and steady stock that will only get stronger as we move towards a cashless society. I've been using Paypal to send and receive money for over 15 years and I couldn't imagine my life without their services. If you are a freelancer like me, then you know how many clients prefer to send money with Paypal. Yes , there are other options but Paypal is the default method to pay not only freelancers but any type of international transaction.
Paypal Makes Money Without Risk
Paypal makes money with every transaction. They are not a bank. Their risk is low because they depend on volume. The company will surely experience a decrease in volume this year but I like their stability and brand name. The Honey acquisition was a nice touch since that could drive more Paypal account signups.
As long as they continue to drive signups and volume, the company will make a lot of money. While other sectors are facing the risk of bankruptcy (Airlines, cruise lines & banks), Paypal only suffers from reduced volume. They have a large $10 billion cash balance (as of 12/30/19) and will be fine. I know my investment is fairly safe.
Solid Growth but No Dividend?
At over $100 billion market cap, I wish Paypal would consider paying a dividend in the future. I like Visa stock slightly more because of the extra quarterly income but surely Paypal could return more value to shareholders.
2020 guidance has already been reduced but I still added to my stake in Paypal this year. They are boring but consistent. Not exciting but reliable.
Paypal Is a Solid Buy
$17.7 billion in revenue for 2019 and over $2 EPS is pretty good. Paypal is constantly hitting singles and driving the brand forward.
At the end, I like Paypal for its future payments volume and earnings growth. The company plays a key role in our society's digital payent revolution.
Disclosure: I own shares of Paypal (PYPL).