MoneyGram International Inc. (MGI - Free Report) will be providing its digital services in five new countries, namely Australia, the Netherlands, Belgium, Portugal and Austria. With this service, customers in these regions will be able to send money 24/7, directly to more than two billion bank accounts and mobile wallets or to any MoneyGram location in more than 200 countries and territories.
Digital expansion is one of the primary growth strategies for the company in a rapidly changing money-transfer industry. The industry is slated for rapid growth and provides the company with immense business growth opportunities. Data from World Bank's Findex states that digital payments are on the rise. Between 2014 and 2017, the share of adults around the world making or receiving digital payments increased by 11% to reach 52%.
MoneyGram has been continuously making progress on its journey toward becoming a digitally-enabled, customer-centric organization despite competition from new technologies that allow consumers to send and receive money in a variety of ways.
The company’s continued investment in innovative products and services, particularly Digital solutions, such as the global expansion of moneygram.com, mobile solutions and account deposit services, positions the company to accelerate its digital transformation and diversify its product and service offerings to meet consumers' needs.
MoneyGram online offers a variety of features such as the ability to find a convenient location, check the status of transactions, and estimate online and offline transfer fees. The platform is now available to customers in the United States, the UK, Germany, France, Spain, Australia, the Netherlands, Belgium, Portugal and Austria.
The company’s effort in this direction has led to growth in revenues from its digital platform. Digital solutions’ revenues for 2017 was $211.6 million, or 14% of money transfer revenue and increased by 9% year over year. Moneygram.com, which represents 42% of Digital solutions revenue for 2017, grew 25% over 2016.
In the first quarter of 2018, digital revenues represented 16% of total money transfer revenues. At the same time, Moneygram.com revenue grew 21% led by new customer acquisitions following the successful launch in Spain and France.
In the last six months the stock has lost 49%, compared with the industry’s decline of 9%. Pressure on revenues due to stiff competition coupled with soaring expenses on account of high compliance and investment in business have taken a toll on the shares.
Another company in the same space, Western Union Co. (WU - Free Report) , is also making massive investments in its digital platform and the proportion of revenues from this channel has been growing for the past several quarters.
MoneyGram carries a Zacks Rank #3 (Hold). Some stocks worth considering are Financial Engines, Inc. and Safety, Income and Growth, Inc. (SAFE - Free Report) . Each of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Financial Engines has surpassed estimates in three of the four reported quarters, with an average positive surprise of 2.96%.
Safety, Income and Growth has seen the Zacks Consensus Estimate for current-year earnings being revised 10.9% upward over the last 30 days.
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