Three reasons to buy this blue chip stock without any pressure.

This can seem like a daunting task when you first start investing in the stock market. One way for investors to alleviate their initial fears is to focus on the most advantageous and well-known companies.

These blue chip stock You can add some security to your portfolio, and perhaps no company is more secure than Hewlett-Packard. Visa (NYSE: V) That's more like it. This top-tier financial firm has been a big winner over the past decade. This top-tier financial firm has been a big winner over the past decade, with an aggregate return of 488%.

Even better, it still looks like a stress-free buy.

Avoid loan games

One of the reasons Visa appears to be a stress-free stock purchase is because of its business model. Investors are interested in JP Morgan Chase (bank) respond in singing Bank of AmericaTraditional banks are no strangers to it. The financial institutions are also known for their ability to take in deposits and lend money to consumers. At a high level, these financial institutions take deposits and lend money to consumers, sometimes through credit cards.

These unsecured loans create Risk of default. This requires banks to set aside large amounts of capital to cover potential loan losses. These losses may surge during economic slowdowns and recessions. As a result, these banks are subject to cyclical fluctuations in response to changes in the economy and interest rates.

Visa is more of a technology and communications company than a financial institution. It provides the infrastructure that enables merchant and consumer banks to communicate with each other and facilitate transaction processing. This business model is much less risky.

Light Asset Operations

Another reason why Visa is a stress-free buying opportunity is its business model. The company does not lend money and therefore does not earn interest. Instead, Visa charges a minimal fee for each payment method used on the 4.3 billion Visa-branded cards currently in use. These fees are typically less than 0.15% of the transaction amount.

But with Visa processing $15 trillion in payment transactions in FY2023, these fees add up to a lucrative business. Over the past five years, Visa's operating margins have hovered above 60%, which is truly remarkable. It's hard to find a more profitable company.

In addition, Visa's technology is largely established, so its capital investment needs are minimal. In the first quarter of fiscal 2024, which ended December 31, the company's capital expenditures were only $267 million, or 3% of revenues.

Thanks to its asset-light model, Visa generates significant free cash flow.

Harnessing the digital payments revolution

Gwen, Visa is a very old company. (math.) genusmarket valueUp to US$553 billion The outlook for Visa's growth, however, remains favorable. Wall Street analysts consistently expect Visa's revenues to grow at a CAGR of more than 10% over the next three fiscal years.

A key microdriver of this growth will be the continued shift from cash and paper transactions to non-cash payments. Even in developed economies, there is still plenty of room to grow the market share of card transactions. In emerging markets, the opportunities are even greater.

The prospect of huge growth attracts competition. For its part, Visa has had to contend with the rise of various fintech companies trying to eat into its rock. In addition, cryptocurrencies and blockchain technology are also likely to take hold in the payments space.

However, even with all of this growing hysteria about its model, Visa's volume, sales, and earnings have continued to grow strongly. The company's durability is another reason why it's now a stress-free blue chip stock.

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When our team of analysts has a stock investment recommendation, it's a good idea to listen to it. After all, they've been running a newsletter for 20 years calledMotley Fool Stock AdvisorIt has more than tripled the market*.

They have just announced what they think investors are currently doing.-est (superlative suffix)Worth buying10Only ......Visa made the list, but there are nine other stocks you may have overlooked.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising郃 partner of The Ascent, a Motley Fool company. Neil Patel and his clients have no position in any of the above stocks.The Motley Fool holds and recommends Bank of America, JPMorgan Chase and Visa.The Motley Fool has a disclosure policy.

3 Reasons This Blue Chip Stock Is A Stress-Free Buy was originally published by The Motley Fool.