Reviewing Mastercard (MA) and MoneyGram International (MGI)

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

Analyst Ratings

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

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



Mastercard presently has a consensus target price of $178.79, indicating a potential upside of 0.97%. MoneyGram International has a consensus target price of $17.70, indicating a potential upside of 102.92%. Given MoneyGram International’s higher possible upside, analysts plainly believe MoneyGram International is more favorable than Mastercard.

Profitability

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

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

Volatility & Risk

Mastercard has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, MoneyGram International has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Dividends

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.

Institutional and Insider Ownership

76.1% of Mastercard shares are held by institutional investors. Comparatively, 86.4% of MoneyGram International shares are held by institutional investors. 0.3% of Mastercard shares are held by insiders. Comparatively, 45.4% of MoneyGram International shares are held by 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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mastercard $12.50 billion 14.90 $3.92 billion $4.58 38.66
MoneyGram International $1.60 billion 0.30 -$29.80 million $0.88 9.91

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.

Summary

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

Mastercard Company Profile

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.

MoneyGram International Company Profile

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.

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