Critical Review: Moneygram International (MGI) versus Global Payments (GPN)
Moneygram International (NASDAQ: MGI) and Global Payments (NYSE:GPN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.
Global Payments pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. Moneygram International does not pay a dividend. Global Payments pays out 3.1% of its earnings in the form of a dividend.
Insider and Institutional Ownership
89.6% of Moneygram International shares are owned by institutional investors. Comparatively, 98.6% of Global Payments shares are owned by institutional investors. 49.5% of Moneygram International shares are owned by company insiders. Comparatively, 0.9% of Global Payments shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Moneygram International and Global Payments’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Moneygram International and Global Payments, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Moneygram International presently has a consensus price target of $14.16, suggesting a potential downside of 9.98%. Global Payments has a consensus price target of $94.26, suggesting a potential upside of 0.00%. Given Global Payments’ stronger consensus rating and higher possible upside, analysts plainly believe Global Payments is more favorable than Moneygram International.
Earnings & Valuation
This table compares Moneygram International and Global Payments’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Moneygram International||$1.63 billion||0.52||$226.70 million||$0.48||32.77|
|Global Payments||$4.19 billion||3.43||$1.15 billion||$1.63||57.83|
Global Payments has higher revenue and earnings than Moneygram International. Moneygram International is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Moneygram International has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500. Comparatively, Global Payments has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
Global Payments beats Moneygram International on 13 of the 16 factors compared between the two stocks.
About Moneygram International
MoneyGram International, Inc. (MoneyGram) is a global provider of money transfer services. The Company operates through two segments: Global Funds Transfer and Financial Paper Products. The Company offers its services under the MoneyGram brand. The Company’s Global Funds Transfer Segment provides money transfer services and bill payment services primarily to unbanked and underbanked consumers. The Financial Paper Products Segment provides money orders to consumers through its agents and financial institutions located across the United States and Puerto Rico. The Company’s offerings include money transfers, bill payment services, money order services and official check processing. The Company’s money transfer services enable its consumers to send and receive funds across the world through its global network of locations. The Company also offers Digital/Self-Service solutions, such as moneygram.com, mobile solutions, account deposit and kiosk-based services.
About Global Payments
Global Payments Inc. is a provider of payment technology services. The Company provides payment and digital commerce solutions. The Company operates through three segments: North America, Europe and Asia-Pacific. The Company’s segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. The Company’s segments target customers in various industries, including financial services, gaming, government, healthcare, professional services, restaurants, retail, universities, not-for-profit organizations and utilities. It provides services across a range of channels to merchants and partners in over 30 countries throughout North America, Europe, the Asia-Pacific region and Brazil. The Company performs a series of services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back office support services, such as chargeback and retrieval resolution.
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