Stephens has initiated coverage of Mastercard Inc. and Visa Inc. at "overweight."

The rating reflects the companies' opportunities for growth, analyst Brett Huff wrote, making particular note of Mastercard's VocaLink acquisition and its "commitment to emerging non-card payment networks." The deal gives Mastercard about $3 trillion in volume, compared with Visa Direct's $50 billion, Huff said.

Competition from the likes of Alipay, China UnionPay and Amazon bears watching, but the "threats are manageable," according to the analyst. Huff also praised Visa's and Mastercard's track records of protecting against data breaches and of successfully navigating lawsuits.

Huff gave Mastercard a price target of $166. He gave Visa a target of $125.