Euronet Worldwide (NASDAQ: EEFT) and Western Union Company (The) (NYSE:WU) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitabiliy and analyst recommendations.

Volatility and Risk

Euronet Worldwide has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Western Union Company (The) has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares Euronet Worldwide and Western Union Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Euronet Worldwide 8.23% 22.32% 7.95%
Western Union Company (The) 3.50% 84.38% 9.02%

Institutional and Insider Ownership

94.6% of Euronet Worldwide shares are owned by institutional investors. 7.7% of Euronet Worldwide shares are owned by company insiders. Comparatively, 1.1% of Western Union Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Western Union Company (The) pays an annual dividend of $0.70 per share and has a dividend yield of 3.5%. Euronet Worldwide does not pay a dividend. Western Union Company (The) pays out 179.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Union Company (The) has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and target prices for Euronet Worldwide and Western Union Company (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Euronet Worldwide 0 0 5 0 3.00
Western Union Company (The) 4 5 1 0 1.70

Euronet Worldwide presently has a consensus price target of $99.75, indicating a potential upside of 3.03%. Western Union Company (The) has a consensus price target of $20.22, indicating a potential upside of 2.55%. Given Euronet Worldwide’s stronger consensus rating and higher probable upside, equities analysts plainly believe Euronet Worldwide is more favorable than Western Union Company (The).

Valuation & Earnings

This table compares Euronet Worldwide and Western Union Company (The)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Euronet Worldwide $2.05 billion 2.48 $345.38 million $3.09 31.33
Western Union Company (The) $5.43 billion 1.71 $1.36 billion $0.39 50.57

Western Union Company (The) has higher revenue and earnings than Euronet Worldwide. Euronet Worldwide is trading at a lower price-to-earnings ratio than Western Union Company (The), indicating that it is currently the more affordable of the two stocks.

Summary

Euronet Worldwide beats Western Union Company (The) on 10 of the 17 factors compared between the two stocks.

Euronet Worldwide Company Profile

Euronet Worldwide, Inc. is an electronic payments provider. The Company offers payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers. Its product offerings include automated teller machine (ATM), point-of-sale (POS), card outsourcing, card issuing and merchant acquiring services, electronic distribution of prepaid mobile airtime and other electronic payment products. It operates in three segments: EFT Processing Segment provides electronic payment solutions consisting of ATM cash withdrawal and deposit services, outsourced ATM and POS management solutions, and credit and debit card outsourcing; epay Segment provides electronic distribution and processing of prepaid mobile airtime and other electronic payment products and collection services, and Money Transfer Segment provides global consumer-to-consumer money transfer services and global account-to-account money transfer services.

Western Union Company (The) Company Profile

The Western Union Company (Western Union) is a provider of money movement and payment services. The Company operates through three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. The Company’s Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company’s Consumer-to-Business segment provides options to make one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies. Its Consumer-to-Business payments services are available through a range of services that include Speedpay, Pago Facil and Western Union Payments. Western Union’s Business Solutions segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.

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