NYSE:WU

Stock Analysis Report

Executive Summary

The Western Union Company provides money movement and payment services worldwide.

Rewards

Trading at 41.3% below its fair value

Earnings grew by 24.2% over the past year

Pays a high and reliable dividend of 3.43%

Risk Analysis

Earnings are forecast to decline by an average of -5.8% per year for the next 3 years

Has a high level of debt

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Western Union's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.1%

WU

2.1%

US IT

1.5%

US Market


1 Year Return

47.4%

WU

37.2%

US IT

20.1%

US Market

Return vs Industry: WU exceeded the US IT industry which returned 37.2% over the past year.

Return vs Market: WU exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

WUIndustryMarket
7 Day-5.1%2.1%1.5%
30 Day-5.5%4.4%1.4%
90 Day-3.1%13.9%8.7%
1 Year52.9%47.4%38.6%37.2%22.7%20.1%
3 Year48.0%32.4%112.3%103.1%50.1%40.5%
5 Year60.8%34.9%148.0%125.8%73.1%54.1%

Price Volatility Vs. Market

How volatile is Western Union's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Western Union undervalued compared to its fair value and its price relative to the market?

41.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WU ($26.24) is trading below our estimate of fair value ($44.73)

Significantly Below Fair Value: WU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WU is good value based on its PE Ratio (10.6x) compared to the IT industry average (33.1x).

PE vs Market: WU is good value based on its PE Ratio (10.6x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: WU's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: WU has negative assets, so we can't compare its PB Ratio to the US IT industry average.


Next Steps

Future Growth

How is Western Union forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-5.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WU's earnings are forecast to decline over the next 3 years (-5.8% per year).

Earnings vs Market: WU's earnings are forecast to decline over the next 3 years (-5.8% per year).

High Growth Earnings: WU's earnings are forecast to decline over the next 3 years.

Revenue vs Market: WU's revenue (0.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: WU's revenue (0.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WU's Return on Equity is forecast to be very high in 3 years time (65.5%).


Next Steps

Past Performance

How has Western Union performed over the past 5 years?

-7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WU has a large one-off gain of $409.1M impacting its December 31 2019 financial results.

Growing Profit Margin: WU's current net profit margins (20%) are higher than last year (15.2%).


Past Earnings Growth Analysis

Earnings Trend: WU's earnings have declined by -7.4% per year over the past 5 years.

Accelerating Growth: WU's earnings growth over the past year (24.2%) exceeds its 5-year average (-7.4% per year).

Earnings vs Industry: WU earnings growth over the past year (24.2%) exceeded the IT industry 12%.


Return on Equity

High ROE: WU's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Western Union's financial position?


Financial Position Analysis

Short Term Liabilities: WU has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: WU has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: WU has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: WU's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: WU's debt is well covered by operating cash flow (30.7%).

Interest Coverage: WU's interest payments on its debt are well covered by EBIT (7.2x coverage).


Balance Sheet

Inventory Level: WU has a low level of unsold assets or inventory.

Debt Coverage by Assets: WU has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Western Union's current dividend yield, its reliability and sustainability?

3.43%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Western Union before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.4%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: WU's dividend (3.43%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: WU's dividend (3.43%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: WU's dividends per share have been stable in the past 10 years.

Growing Dividend: WU's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.3%), WU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WU's dividends in 3 years are forecast to be well covered by earnings (32.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.6yrs

Average management tenure


CEO

Hikmet Ersek (58yo)

9.4yrs

Tenure

US$9,175,300

Compensation

Mr. Hikmet Ersek has been the Chief Executive Officer and President at The Western Union Company since September 1, 2010. Mr. Ersek served as the Chief Operating Officer of The Western Union Company from J ...


CEO Compensation Analysis

Compensation vs Market: Hikmet's total compensation ($USD9.18M) is about average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Hikmet's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Hikmet Ersek
President9.4yrsUS$9.18m0.19% $20.9m
Rajesh Agrawal
Executive VP & CFO5.6yrsUS$3.43m0.050% $5.5m
Caroline Tsai
Chief Legal Officer & Corporate Secretary2.2yrsUS$1.95m0.0018% $191.9k
Jean Farah
Executive VP & President of Global Network10.9yrsUS$1.99m0.037% $4.0m
Amintore T. Schenkel
Senior VP0yrsno data0.015% $1.7m
Brad Windbigler
Senior VP0yrsno datano data
Tyler Hand
Chief Compliance Officer1.1yrsno datano data
Nicole Vogrin
Chief Corporate Affairs & Communications Officer1.1yrsno datano data
Richard Williams
Chief People Officer7.1yrsno data0.017% $1.9m
Carter Hunt
Senior VP & GM of US0yrsno datano data

5.6yrs

Average Tenure

53yo

Average Age

Experienced Management: WU's management team is seasoned and experienced (5.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hikmet Ersek
President9.4yrsUS$9.18m0.19% $20.9m
Jeffrey Joerres
Non-Executive Chairman of the Board2.8yrsUS$485.00k0.0011% $119.6k
Richard Goodman
Independent Director8.1yrsUS$278.80k0.013% $1.4m
Solomon Trujillo
Independent Director7.6yrsUS$245.00k0.0028% $309.3k
Roberto Mendoza
Independent Director13.4yrsUS$245.00k0.016% $1.8m
Betsy Holden
Independent Director13.4yrsUS$285.00k0.0012% $131.6k
Michael Miles
Independent Director13.4yrsUS$245.00k0.030% $3.3m
Martin Cole
Independent Director4.6yrsUS$270.00k0.0054% $593.4k
Frances Fragos Townsend
Independent Director6.5yrsUS$335.00kno data
Angela Sun
Independent Director1.6yrsUS$106.90kno data

7.8yrs

Average Tenure

61yo

Average Age

Experienced Board: WU's board of directors are considered experienced (7.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WU insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Western Union Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Western Union Company
  • Ticker: WU
  • Exchange: NYSE
  • Founded: 1851
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$10.968b
  • Shares outstanding: 418.00m
  • Website: https://www.westernunion.com

Number of Employees


Location

  • The Western Union Company
  • 7001 East Belleview Avenue
  • Denver
  • Colorado
  • 80237
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WUNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 2006
W3UDB (Deutsche Boerse AG)YesCommon StockDEEURSep 2006
WU *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 2006
0LVJLSE (London Stock Exchange)YesCommon StockGBUSDSep 2006
WUNI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR REPR 1 COM SHARE USD0.01BRBRLJul 2015

Biography

The Western Union Company provides money movement and payment services worldwide. The company operates in two segments, Consumer-to-Consumer and Business Solutions. The Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. This segment offers international cross-border transfers and intra-country transfers, as well as money transfer transactions through Websites and mobile devices. The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium size enterprises, other organizations, and individuals; and foreign currency forward and option contracts. The company also facilitates bill payments from consumers to businesses and other organizations, as well as offers money order and other services. It serves primarily through a network of agents. The Western Union Company was founded in 1851 and is headquartered in Denver, Colorado. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:58
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.