MoneyGram in Expansion Mode - Analyst Blog
22 6월 2012 - 2:14AM
Zacks
Moneygram International Inc.(MGI) announced the
addition of 30 countries to its direct-to-account or
cash-to-account services, which will facilitate transfer of funds
to Philippines that was previously restricted to the U.S. alone.
Out of the participating banks, 20 are located in Philippines.
The service will enable customers to send money from across 30
countries to Philippines. This news follows the report
published by the World Bank, which states that Philippines is the
fourth-largest country to receive remittances from around the
world.
According to World Bank’s estimate, an amount of $23 billion was
remitted to the country in 2011. Philippines has one of the
highest remittances primarily because majority of its population
live and work abroad and need to send money back to their families
in their country.
On a separate development, the company introduced MoneyGram
xpress in order to extend its relationships with Speedway
LLC, benefiting 1,460 chain stores across the seven states in the
Midwest. The service will allow customers to avail various services
like purchase in-lane, a pre-paid money transfer package at a
predefined dollar price.
Being the second largest provider of international remittances,
MoneyGram is well positioned to grow in the near term. We believe
all of the above initiatives undertaken by the company will support
its top-line growth and help the company achieve its 2012 guidance
of 7–9% revenue increase.
The steady increase in the company’s share prices since the
beginning of June is backed by its positive expansion efforts. This
also reflects investors’ confidence in the operational efficiency
of the company. The stock has gained about 9.2% during that
period.
The competitors of MoneyGram are equally proactive on the
expansion front. Its closest competitor Western Union
Co. (WU) is on an aggressive expansion spree. Recently, it
announced an agreement with Veridian Credit Union to serve its
members with global money transfer facilities. It also signed an
agreement with Michigan-based Citizens Bank to provide its global
remittance service to Citizens Bank customers via 219 of its
branches across Ohio, Michigan and Wisconsin.
MoneyGram currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on its shares.
MONEYGRAM INTL (MGI): Free Stock Analysis Report
WESTERN UNION (WU): Free Stock Analysis Report
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