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The Western Union Co WU

Morningstar Rating
$13.55 +0.07 (0.52%)
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Company Report

Western Union Has a Moat, but Also Has Limited Growth Prospects

Western Union's primary macroeconomic exposure is to employment markets in the developed world, as the search for better economic opportunities is the fundamental driver for money transfers. While conditions have improved over time in the United States and Europe, a region that is about equally important for Western Union as the US, growth remains modest, with new entrants adding to the issues for legacy operators like Western Union. At this point, we don't see a long-term catalyst to meaningfully improve growth, with management focused on just stabilizing the business in the near term. Recent geopolitical events have been an additional headwind as the company made the decision to exit Russia, a significant money transfer market. We continue to believe Western Union has a moat based on its sizable scale advantage, but with a stagnant top line and limited long-term growth prospects, the amount of value the moat will create could be questioned.

Price vs Fair Value

WU is trading at a 20% discount.
Price
$13.55
Fair Value
$27.00
Uncertainty
Medium
1-Star Price
$79.22
5-Star Price
$24.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The demographic factor that has historically driven money transfer growth—namely, the differential between population growth in developing and developed countries—remains in place for the foreseeable future.

Bears

A stricter stance on immigration in developed countries could limit immigrant populations and reduce their employment opportunities and money transfer volume.

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News

Trading Information

Previous Close Price
$13.48
Day Range
$13.3813.63
52-Week Range
$10.3714.19
Bid/Ask
$13.20 / $13.60
Market Cap
$4.64 Bil
Volume/Avg
4.9 Mil / 4.9 Mil

Key Statistics

Price/Earnings (Normalized)
7.79
Price/Sales
1.16
Dividend Yield (Trailing)
6.94%
Dividend Yield (Forward)
6.94%
Total Yield
13.59%

Company Profile

Western Union provides domestic and international money transfers through its global network of about 600,000 outside agents. The company handled over 270 million transactions in 2023 and is the largest money transfer company in the world.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Small Value
Total Number of Employees
9,000

Competitors

Valuation

Metric
WU
MA
PYPL
Price/Earnings (Normalized)
7.7939.0612.57
Price/Book Value
9.9164.553.27
Price/Sales
1.1618.052.39
Price/Cash Flow
5.6332.5411.55
Price/Earnings
WU
MA
PYPL

Financial Strength

Metric
WU
MA
PYPL
Quick Ratio
0.950.811.24
Current Ratio
1.011.171.29
Interest Coverage
7.9324.7215.21
Quick Ratio
WU
MA
PYPL

Profitability

Metric
WU
MA
PYPL
Return on Assets (Normalized)
7.81%29.19%6.30%
Return on Equity (Normalized)
117.32%191.08%24.36%
Return on Invested Capital (Normalized)
23.06%56.34%15.74%
Return on Assets
WU
MA
PYPL
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