MoneyGram International, Inc. (MGI - Free Report) , a leading global money transfer company, has announced a partnership with Agricultural Bank of Egypt (ABE), one of the biggest agricultural banks in Arabian countries and the Middle East. Per the pact, MoneyGram will provide money transfer services at the bank's 1,210 branches throughout the country.
MoneyGram’s money transfer services are available at select ABE locations and will expand to include all branches across the country. The service allows customers to receive currency in either U.S. dollars or euros.
MoneyGram is positive about this partnership given that Egypt is the fifth biggest recipient of remittances globally, as the total received climbed 17% to $29 billion, per the World Bank. In 2018, remittances accounted for 11.6% of the country’s GDP. Notably, remittances represent the country's second-largest source of foreign exchange after exports.
This partnership will lead to increased remittance transactions for MoneyGram leading to overall revenue growth. The company has been extensively signing pacts and deals with banks, retailers and crypto currencies to expand its business.
MoneyGram’s business suffered in 2018 and revenues were under pressure in the first half of 2019 as well given intense competition and high compliance related costs. The company has taken several steps to regain its profitability.
To this effect, it recently joined forces with Ripple, which has made an equity investment of $30 million in the company. This agreement will help MoneyGram grow its Global Funds Transfer segment, which is its primary revenue driver. This transaction is expected to reduce working capital needs and generate additional earnings and cash flow.
MoneyGram is also investing in its digital platform. Recently, the company redesigned its online platform in the United States named MoneyGram.com and also launched its mobile app. Its app and online platform are available in 24 countries. In the second quarter, its non-U.S. online transaction growth was more than 100% on a year-over-year basis.
We believe the aforementioned moves will aid the company’s long-term growth. Investors also seem impressed, which has led to a 118.5% year-to-date increase in MoneyGram’s share price, compared with the industry’s growth of 18.8%.
MoneyGram carries a Zacks Rank #3 (Hold).
Some better-ranked players worth considering are Fortress Transportation and Infrastructure Investors LLC (FTAI - Free Report) , FEDNAT HOLDING CO (FNHC - Free Report) and LendingClub Corporation (LC - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fortress Transportation and Infrastructure Investors LLC, FEDNAT HOLDING and LendingClub have surpassed estimates in the last reported quarter by 71.43%, 90% and 15.8%, respectively.
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