Analyzing Heartland Payment Systems (HPY) and Moneygram International (MGI)

Heartland Payment Systems (NYSE: HPY) and Moneygram International (NASDAQ:MGI) are both transaction & payment services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Heartland Payment Systems and Moneygram International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heartland Payment Systems 0 0 0 0 N/A
Moneygram International 2 4 0 0 1.67

Moneygram International has a consensus price target of $16.21, suggesting a potential upside of 28.17%. Given Moneygram International’s higher probable upside, analysts clearly believe Moneygram International is more favorable than Heartland Payment Systems.

Profitability

This table compares Heartland Payment Systems and Moneygram International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heartland Payment Systems 3.25% 27.90% 6.09%
Moneygram International 1.86% -14.19% 1.20%

Earnings & Valuation

This table compares Heartland Payment Systems and Moneygram International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heartland Payment Systems N/A N/A N/A $2.27 45.41
Moneygram International $1.63 billion 0.42 $16.30 million $0.45 28.11

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

Volatility & Risk

Heartland Payment Systems has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Moneygram International has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.

Dividends

Heartland Payment Systems pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Moneygram International does not pay a dividend. Heartland Payment Systems pays out 17.6% of its earnings in the form of a dividend. Moneygram International has increased its dividend for 7 consecutive years.

Institutional and Insider Ownership

91.1% of Moneygram International shares are owned by institutional investors. 49.5% of Moneygram International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Moneygram International beats Heartland Payment Systems on 7 of the 13 factors compared between the two stocks.

About Heartland Payment Systems

Heartland Payment Systems, Inc. is a United States-based company that provides payment processing services to merchants. The Company’s electronic payment processing services facilitate the exchange of information and funds between merchants and cardholders’ financial institutions. Its segments include Payment Processing, which offers card payment processing and related services to its small and medium-sized enterprise merchants and Network Services merchants; Campus Solutions, which offers payment processing, integrated commerce solutions, loan services and open- and closed-loop payment solutions to institutions of higher education; Heartland School Solutions, which offers school nutrition and point of sale solutions and associated payment solutions to K-12 schools; Heartland Payroll Solutions, which provides payroll processing and related tax filing services, and Other, including integrated payments solutions for small ticket merchants, and loyalty and gift card marketing solutions.

About Moneygram International

MoneyGram International, Inc. (MoneyGram) is a global provider of money transfer services. The Company operates through two segments: Global Funds Transfer and Financial Paper Products. The Company offers its services under the MoneyGram brand. The Company’s Global Funds Transfer Segment provides 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 located across the United States and Puerto Rico. The Company’s offerings include money transfers, bill payment services, money order services and official check processing. The Company’s money transfer services enable its consumers to send and receive funds across the world through its global network of locations. The Company also offers Digital/Self-Service solutions, such as moneygram.com, mobile solutions, account deposit and kiosk-based services.

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