Credit-Card Company Stocks Charge Ahead
An unexpected group of defensive stocks is emerging from the chaos of the stock market: credit-card companies.</br></br>Stocks of MasterCard Inc. and Visa Inc., which run the processing networks for credit-card transactions, are charging ahead, climbing 40% and 21%, respectively, this year. They have far outpaced typical defensive sectors such as utilities, up 4.2%, and consumer staples, up 0.5%. Credit-card companies typically aren't considered defensive plays due to the cyclical nature of the financial sector.</br></br>The gains contrast with a 15% drop as of Wednesday in the Standard & Poor's Consumer Finance Index this year.</br></br>Even though the economy is barely expanding, shoppers still are swiping cards at an increasing rate. This is a point of attraction for investors seeking exposure to a segment of the financial-services industry that isn't being ravaged by worries about euro-zone debt or the outlook for global growth.</br></br>"If you have to have exposure to financial services, then credit-card companies seem to be a lower-risk vehicle without exposing yourself to sovereign-debt worries or mortgage problems," said Phil Orlando, equity strategist at Federated Investors.