Contrasting MoneyGram International (MGI) and Mastercard (MA)

MoneyGram International (NASDAQ: MGI) and Mastercard (NYSE:MA) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Dividends

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Mastercard pays an annual dividend of $1.00 per share and has a dividend yield of 0.6%. MoneyGram International does not pay a dividend. Mastercard pays out 21.8% of its earnings in the form of a dividend. Mastercard has increased its dividend for 6 consecutive years.

Risk & Volatility

MoneyGram International has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500. Comparatively, Mastercard has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Earnings and Valuation

This table compares MoneyGram International and Mastercard’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MoneyGram International $1.60 billion 0.30 -$29.80 million $0.88 9.76
Mastercard $12.50 billion 14.73 $3.92 billion $4.58 38.22

Mastercard has higher revenue and earnings than MoneyGram International. MoneyGram International is trading at a lower price-to-earnings ratio than Mastercard, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares MoneyGram International and Mastercard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MoneyGram International -1.86% -14.43% 1.24%
Mastercard 31.33% 83.57% 24.33%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for MoneyGram International and Mastercard, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MoneyGram International 1 2 0 0 1.67
Mastercard 0 2 29 0 2.94

MoneyGram International presently has a consensus price target of $17.70, indicating a potential upside of 106.00%. Mastercard has a consensus price target of $178.79, indicating a potential upside of 2.14%. Given MoneyGram International’s higher possible upside, analysts clearly believe MoneyGram International is more favorable than Mastercard.

Insider & Institutional Ownership

87.0% of MoneyGram International shares are held by institutional investors. Comparatively, 76.1% of Mastercard shares are held by institutional investors. 45.4% of MoneyGram International shares are held by company insiders. Comparatively, 0.3% of Mastercard shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Mastercard beats MoneyGram International on 12 of the 17 factors compared between the two stocks.

About MoneyGram International

MoneyGram International, Inc., together with its subsidiaries, provides money transfer services in the United States and internationally. The company operates through two segments, Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment offers 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; and official check outsourcing services for financial institutions. This segment sells its money orders under the MoneyGram brand and on a private label or co-branded basis with retail and financial institution. The company also offers digital solutions, such as moneygram.com, mobile solutions, account deposit, and kiosk-based services. MoneyGram International, Inc. was founded in 1926 and is based in Dallas, Texas.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services. The company also offers value-added services, such as safety and security products, loyalty and reward programs, information and consulting services, issuer and acquirer processing solutions, and payment and mobile gateways. In addition, it provides various integrated products and services for account holders, merchants, financial institutions, businesses, governments, and other organizations; programs that enable issuers to provide consumers with cards to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid payment programs and management services; and commercial payment products and solutions. Further, the company provides products and services to prevent, detect, and respond to fraud and cyber-attacks, and ensure the safety of transactions. It offers payment solutions and services under the MasterCard, Maestro, and Cirrus brands. Mastercard Incorporated has a strategic partnership with Bahrain Commercial Facilities Company BSC. The company was founded in 1966 and is headquartered in Purchase, New York.

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