Western Union Company (The) (NYSE: WU) and Moneygram International (NASDAQ:MGI) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitabiliy, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Western Union Company (The) has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Moneygram International has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Western Union Company (The) 4.22% 75.64% 8.71%
Moneygram International 1.87% -12.41% 1.10%

Institutional and Insider Ownership

89.8% of Moneygram International shares are held by institutional investors. 1.1% of Western Union Company (The) shares are held by company insiders. Comparatively, 49.5% of Moneygram International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Western Union Company (The) and Moneygram International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Western Union Company (The) $5.43 billion 1.66 $1.36 billion $0.46 41.48
Moneygram International $1.63 billion 0.57 $218.00 million $0.44 39.23

Western Union Company (The) has higher revenue and earnings than Moneygram International. Moneygram International 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.

Dividends

Western Union Company (The) pays an annual dividend of $0.70 per share and has a dividend yield of 3.7%. Moneygram International does not pay a dividend. Western Union Company (The) pays out 152.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Moneygram International has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Western Union Company (The) and Moneygram International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Union Company (The) 4 5 1 0 1.70
Moneygram International 1 4 0 0 1.80

Western Union Company (The) presently has a consensus target price of $20.22, suggesting a potential upside of 5.99%. Moneygram International has a consensus target price of $9.75, suggesting a potential downside of 43.51%. Given Western Union Company (The)’s higher probable upside, research analysts clearly believe Western Union Company (The) is more favorable than Moneygram International.

Summary

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

About Western Union Company (The)

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.

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.

Receive News & Ratings for Western Union Company (The) Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Western Union Company (The) and related companies with MarketBeat.com's FREE daily email newsletter.