Fintech – or financial technology – is huge. And it’s growing. This is something that investors have to be a part of. But what if you want to have your cake and eat it, too?
What if you want to collect safe, growing passive dividend income while you benefit from growing business profits and rising stock prices?
Well, I have great news for you. There are some very high-quality dividend growth stocks out there that are directly exposed to fintech. These are world-class companies. Some of the best businesses in the world, in fact.
They’re making a ton of money and killing the market in terms of performance. And they pay safe, growing passive dividend income.
Today, I want to tell you about three fintech dividend growth stocks that you should consider putting in your portfolio.
Ready? Let’s dig in.
Fintech Stock #1: Apple (AAPL)
The first fintech dividend growth stock to consider for your portfolio is Apple (AAPL). Apple is a global technology company, but they’ve also got fintech exposure.
Ever heard of Apple Pay? Maybe you’ve used it yourself? Well, what do you think that is? That’s fintech at its finest. Apple is such a well-run business that is so intelligent. They’ve got this installed base of hundreds of millions of phones, and Apple is monetizing that base in so many creative ways – including payments.
Customers can get hooked on the ease of paying with their phones.
Whip your phone out and that’s it. With touchless suddenly becoming all the rage, it’s even more useful. This only serves to keep customers in the ecosystem and further bolsters Apple’s own stranglehold on payments. Meanwhile, Apple pays a safe, growing dividend. The stock yields 0.7%. That’s not a huge yield, no. But the company has increased its dividend for 10 consecutive years, with a five-year dividend growth rate of 9.7%. Plus, investing in Apple gives you an ownership slice of one of the biggest and best businesses on the planet. The fintech exposure is just icing on the cake.
This stock doesn’t look super cheap right now, but it almost never does.
In my 10+ years of investing experience, I’ve almost never seen this stock at a level I’d call “cheap”. Look, you get what you pay for. You don’t get a diamond for the price of a cubic zirconia. And Apple is a diamond of a business. The P/E ratio of 30 is on the high end of what I’d personally be willing to pay for shares, but a dip in this name should be looked at as a long-term opportunity.
Fintech Stock #2: Mastercard (MA)
The second fintech dividend growth stock to consider is Mastercard (MA). Mastercard is a multinational financial services company.
This is one of the biggest credit card businesses on the planet, with well over 200 million cardholders. Physical money was starting to go the way of the dodo before the pandemic. Now? People don’t want anything to do with the stuff. The adoption of digital payments is now accelerating. And that shouldn’t be a surprise. Paying digitally is easier, safer, and faster than paying with cash. It’s also more rewarding, literally and figuratively, as customers earn points and rewards on credit card spending that isn’t possible with cash payments.
Customers earn points. And investors earn growing dividends.
If you’re a Mastercard user and shareholder, you earn both. Even better. In regard to the dividend, like Apple, Mastercard stock isn’t a huge income producer. The stock only yields 0.5%. But this compounder is the kind of stock that puts the growth in dividend growth investing – they’ve increased their dividend for 10 consecutive years, with a – get this – 10-year dividend growth rate of 38.9%.
This stock is up more than 300% over the last five years alone.
And there could be plenty more where that came from. If you want market-beating long-term returns, fintech is an area you almost have to be invested in. This is another stock that doesn’t look cheap. The P/E ratio is coming up on 60, which is rich. But it wouldn’t need a significant dip to be considered worthy of long-term investment with the kind of growth the business is putting up.
Fintech Stock #3: Visa (V)
Last but not least, let’s discuss Visa (V). Visa is a global payments technology company.
Here we have the king of the industry, with $8.8 trillion dollars in payments volume last year – during a pandemic. There are 3.3 billion Visa credit cards in circulation. That’s almost half the global population. Visa doesn’t just do fintech. They do it big. And in an industry that is starting to really take off, they’re poised to benefit from the lion’s share of that growth.
The company’s slogan was “It’s everywhere you want to be.” Well, this stock is everywhere you want to be.
That’s assuming you want safe, growing passive dividend income and market-crushing total returns. This stock is the epitome of having your cake and eating it, too. The stock’s yield of 0.6% might not get the income job done on Day 1. Instead, this is a world-class compounder that starts to spit out serious dividend income when you’re patient and let those dividend raises add up. Visa has increased its dividend for 13 consecutive years, with a 10-year dividend growth rate of 25%.
This stock is up more than 1,100% over the last decade.
It’s absolutely crushed the S&P 500. And the crazy thing is, in a lot of ways, Visa is just getting warmed up. They went public in 2008. We’re talking less than 15 years ago. And digital payments? The sky is the limit. This stock isn’t cheap. But it didn’t look cheap when I personally bought shares in 2014, either. Yet it’s up massively since then. Visa isn’t low-quality, high-yield junk. It’s a world-class business that deserves a high valuation. The current P/E ratio of 56 is arguably a bit too high, but Visa could be a crown jewel of a dividend growth stock portfolio. So keep an eye out for dips in this name if you want to get in at a lower valuation.
— Jason Fieber
P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.
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