MoneyGram Maintains Its Position In Industry Despite Hurdles

On Sep 4, we updated our research report on the money transfer company MoneyGram International Inc. MGI.

MoneyGram serves more than 10 million customers worldwide via about 353,000 locations in more than 200 countries and territories. While the market for money transfer and bill payment services continues to be very competitive, the company remains the second largest global money transferer in the world based on total face value of remittances in 2014.

MoneyGram’s diverse products and services are available through online and mobile channels. While expanding its distribution channels, it aims to create new products and services via acquisitions and strategic alliances. The company’s offerings include money transfers, bill payment services, money order services and official check processing. It has two primary reporting segments: Global Funds Transfer and Financial Paper Products.

MoneyGram’s partnership with industry leaders adds value and convenience to its existing customers and helps in network expansion. By 2013 end, the company expanded its worldwide agent network by twofold since 2007, which further increased by 14,000 locations year over year in 2014.

Increasing demand in transaction volumes both in domestic and international markets has paved the way for growth over the past several quarters. The company has also aligned with over 30 post offices and numerous national banks globally to provide convenient and affordable money transfer services.

Nevertheless, increased commission and operating expenses as well as compliance spending also exert pressure on operating margins and cash flow at a time when operating revenues are already facing headwinds due to global instability. Moreover, we expect the company to face stiff competition from the pending Xoom-Paypal merger.

Currently, MoneyGram carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the same sector are Euronet Worldwide, Inc. EEFT, Consumer Portfolio Services, Inc. CPSS and Blackhawk Network Holdings, Inc. HAWK. While Euronet Worldwide carries a Zacks Rank # 1 (Strong Buy), the other two stocks carry the same Zacks Rank as MoneyGram.

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MONEYGRAM INTL (MGI): Free Stock Analysis Report
 
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