MoneyGram International Inc. (MGI) announced a strategic alliance with Dollar General in order to expand its money transfer network in the US. Dollar General is a leading retail brand that operates as a chain of convenience and low-priced products stores across the US.
Accordingly, MoneyGram added 10,000 locations of Dollar General, thereby strengthening its money transfer network by over 50,000 locations in the US. Through these locations, the company offers money remittances to over 197 countries and territories.
The latest addition of Dollar General has also helped MoneyGram achieve a milestone of 310,000 global agent locations, surging 16% in a year’s time. Growth was primarily driven by additions in Russia, Africa and Portugal, among others. The company successfully procured about 43,000 agent locations in 2012. MoneyGram’s agents primarily include retailers, international post offices and financial institutions.
Money Transfer Biz Reflects Growth
MoneyGram continues to bolster its position as one of the leading money transfer companies in the world by constantly expanding its payment network via alliances. The effects of its consistent growth strategies were also visible in the company’s recently announced fourth-quarter 2012 results.
MoneyGram earned 27 cents per share in the fourth quarter of 2012, which came in a penny higher than the Zacks Consensus Estimate. However, reported earnings soared from the year-ago quarter’s earnings of 4 cents a share.
Higher money transfer transaction volumes as well as higher fee and other revenues drove the top line that grew 10.1%, while lower interest expenses helped the bottom line and free cash flow. However, lower investment income along with higher operating and commission expenses deteriorated the margins.
Simultaneously, MoneyGram is also enhancing its brand awareness by developing user-friendly payment solutions that suit the new market trends. In this regard, the company offers various self-service products such as mobile, kiosk and online money transfer payment processes. These efforts are not only creating demand for the global remittances but also boosting the company’s brand value.
MoneyGram carries a Zacks Rank #3 (Hold). Other strong performers in the financial sector include Financial Engines Inc. (FNGN),Fleetcor Tech Inc. (FLT) and Bank of Montreal (BMO), all of which carry a Zacks Rank #1 (Strong Buy).
More From Zacks.com