'High quality' credit card stock has earned its place in portfolio: strategist

Why ‘High Quality’ Credit Card Stocks Are Becoming a Must-Have for Savvy Investors: Insights from a Top Strategist

When it comes to building a resilient, growth-oriented portfolio in 2025, two stalwarts stand out for their unique blend of stability, cash flow generation, and strategic market positioning: Visa (V) and Waste Management (WM). Adam Phillips, Director of Portfolio Strategy at EP Wealth Advisors, recently highlighted these names on CNBC’s “Power Check,” and here at Extreme Investor Network, we’re diving deeper into why these picks deserve a permanent seat at your investment table—and what savvy investors should do next.

Visa: The Payment Powerhouse Riding the Consumption Wave

Visa’s stock has quietly outpaced the S&P 500 in 2025, gaining roughly 11% compared to the index’s 10%. While that may seem marginal, it underscores Visa’s enduring strength in a market where consumer spending remains a critical growth engine. Phillips has held Visa in his equity strategy for 15 years—a testament to the company’s consistent performance and robust business model.

Why Visa Matters More Than Ever:
Visa operates in a near-duopoly with Mastercard, controlling a significant share of global payment processing. This oligopolistic position translates into pricing power and steady cash flow—a crucial advantage in uncertain macroeconomic environments. Visa’s ability to “print cash,” as Phillips puts it, is not just a catchy phrase; it’s a reflection of the company’s strong free cash flow generation, which fuels reinvestment, dividends, and share buybacks.

The Bigger Picture:
As economies digitize further, the shift from cash to electronic payments is accelerating. According to a 2024 report by McKinsey, global digital payment volumes are expected to grow at a CAGR of 12% through 2027. This trend bodes well for Visa, whose technology infrastructure and global network are difficult to replicate.

Actionable Insight for Investors:
For portfolio managers and individual investors, Visa represents a high-quality core holding that combines growth with defensive qualities. However, given rising interest rates and inflationary pressures, investors should monitor Visa’s exposure to discretionary consumer spending closely. Allocating a portion of your portfolio to Visa while balancing with more defensive sectors can optimize risk-adjusted returns.

Waste Management: The Unsung Defensive Growth Play

While AI and tech stocks dominate headlines, Waste Management offers a refreshing alternative with its blend of non-cyclical revenue stability and growth potential. Shares have also climbed over 11% year-to-date, reflecting strong market confidence.

Why Waste Management is More Than Just Trash:
Phillips highlights Waste Management’s defensive qualities—its business doesn’t fluctuate wildly with economic cycles. This stability is a prized attribute in volatile markets. Moreover, the company is innovating within its sector, leveraging technology to improve efficiency and sustainability, which are increasingly valued by investors and regulators alike.

Sustainability as a Growth Driver:
Waste Management’s push into recycling, renewable energy from waste, and smart waste solutions aligns with ESG trends that are reshaping capital flows. According to Bloomberg Intelligence, ESG-related investments surpassed $35 trillion globally in 2023, and companies with credible sustainability initiatives are positioned to attract more capital.

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What Investors Should Do Now:
Incorporate Waste Management as a ballast against market volatility. Its defensive nature coupled with growth in green initiatives makes it a compelling choice for portfolios seeking both income and capital appreciation. Advisors should also explore thematic funds or ETFs that emphasize environmental solutions, where Waste Management often features prominently.

What’s Next? Strategic Portfolio Moves for 2025 and Beyond

  • Diversify with Quality: Visa and Waste Management exemplify the blend of growth and defense investors need in today’s market. Consider increasing allocations to high-quality, cash-generative companies with durable competitive moats.

  • Leverage Thematic Investing: The rise of digital payments and ESG investing isn’t a passing fad. Investors should seek exposure to these mega-trends through direct stock picks or thematic ETFs.

  • Stay Vigilant on Macroeconomic Shifts: While consumption remains strong, inflation and interest rate dynamics can impact discretionary spending. Regularly reassess the economic landscape and adjust exposure accordingly.

  • Monitor Regulatory and Technological Developments: Both Visa and Waste Management operate in sectors sensitive to regulation and innovation. Staying informed can provide early signals for tactical adjustments.

Final Thought

Visa and Waste Management are not just stocks; they’re strategic plays that reflect broader economic and societal trends. Their combination of growth, cash flow, and defensive characteristics makes them essential considerations for any forward-thinking portfolio. As always, the key to investment success lies in blending insight with action—something Extreme Investor Network is committed to delivering.

Sources:

  • CNBC “Power Check” Interview with Adam Phillips, EP Wealth Advisors
  • McKinsey & Company, Digital Payments Report 2024
  • Bloomberg Intelligence, ESG Investment Trends 2023

Source: ‘High quality’ credit card stock has earned its place in portfolio: strategist

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