Why Visa Could Be Your Safest Bet in 2026

Buffett’s Berkshire Hathaway owns over 40 public companies, with 6 landing in the Dow Jones. Here’s the thing: Visa might be the most underrated of them all.

The Cash Machine Nobody Talks About

Visa converts nearly 50% of revenue into free cash flow—think of it as pure profit that doesn’t require constant reinvestment. It’s a network effect play: more cards = more merchants accept Visa = more partnerships = more cards. A perfect loop.

Unlike American Express (which pays cardholders rewards), Visa outsources that to banks. No credit risk, no reward headaches. Just take a cut and scale.

Fiscal 2025 numbers tell the story:

• Operating cash: $23.06B
• Capex (maintenance costs): $1.48B
• Free cash flow: $21.58B
• Buybacks: $18.19B (4x the dividend)

The Buyback Trick

Visa dumps $18B annually into stock buybacks instead of dividends. Fewer shares outstanding = earnings per share grow faster even if the core business just ticks along.

Wild part? Despite 4x gains over 10 years, Visa’s P/E ratio (32.3x) is still below its 10-year average (34.3x). Most mega-cap stocks are pricey relative to earnings. Visa isn’t.

Why It Works in 2026

Consumer spending down? Visa still prints earnings in low double digits—networks don’t care about recessions. Low valuation + predictable growth + management returning cash = the formula works.

It’s boring. It’s reliable. It’s exactly what Buffett buys.