WU  Western Union Company (The)

Exchange

NYSE

Sector

Miscellaneous

Industry

Business Services

Market Cap.

9.18B

Vuru Grade

62.48/100

Current Price

$19.47
+0.31 (+1.62%)

Growth Price

$11.12
Overvalued by 42.87%

Stability Price

$8.06
Overvalued by 58.61%

Company Metrics

  • P/E 42.23
  • P/S 1.66
  • P/B 12.05
  • EPS 0.46
  • Cash ROIC 43.77%
  • Cash Ratio 0.39
  • Dividend 0.7 / 3.67%
  • Avg. Vol. 3.55M
  • Shares 471.49M
  • Market Cap. 9.18B

Company Description

The Western Union Company provides money transfer and payment services worldwide. The company's Consumer-to-Consumer segment offers consumer-to-consumer money transfer services through a network of third-party agents using multi-currency and real-time money transfer processing systems. Its services include walk-in money transfer, online money transfer, telephone money transfer, account based money... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Western Union: The Enduring Appeal Of Physical Currency
Seeking Alpha - Jul 6, 2017
... and relentless press coverage about cryptocurrencies and cashless economies, cash use remains very resilient. The headlines have caused investors to undervalue the cash transfer business and the prospects of the Western Union Company (NYSE:WU).
Western Union enters gas-station market with Australian deal
9NEWS.com - Jul 24, 2017
DENVER BUSINESS JOURNAL - The Western Union Company is entering a new market - gas stations - with a new deal it announced with BP in Australia.
Western Union Unveils New Money Transfer Channel in Australia - Business Wire (press release)
Lost Huntington: Western Union
Huntington Herald Dispatch - Jul 24, 2017
Western Union was formed in 1856 through the merger of two earlier telegram companies. It rapidly bought out hundreds of smaller companies, and soon its lines reached from the East Coast to the Mississippi River and from the Great Lakes to the Ohio River.
Is There Strength Behind the Numbers For The Western Union Company (NYSE:WU)
Clayton News - 32 minutes ago
After a recent scan, we can see that The Western Union Company (NYSE:WU) has a Shareholder Yield of 7.58% and a Shareholder Yield (Mebane Faber) of 4.76%.
Western Union money transfers move into BP servos
Which-50 (blog) - 3 hours ago
The Western Union Company and BP Australia have annouced a deal whereby Western Union services will be enabled through the mobile app in 302 BP stores nationwide (including 150 with digital kiosks).
Active Movers: The Western Union Company (NYSE:WU), Vishay Intertechnology ... - Stock Watch
Western Union Stock Continues to Lose Value: Here's Why
Zacks.com - Jul 7, 2017
The stock of Western Union Co. (WU - Free Report) seems to have fallen out of favor with investors owing to a number of headwinds plaguing the company.
Western Union Company (The) (WU) Hits 52-Week High - Highlight Press
Western Union Reaches Analyst Target Price
Nasdaq - Jul 3, 2017
In recent trading, shares of Western Union Co (Symbol: WU) have crossed above the average analyst 12-month target price of $18.96, changing hands for $19.05/share.
Is The Western Union Company (WU) a good buy?
TopChronicle - 10 hours ago
The share of The Western Union Company (WU) currently has a value of $19.16 while the company's 52 week low is at $18.42, the shares dropped to the 52 week low on 07/06/17.
Western Union teams up with BP to offer money transfer service at servos - The Australian
Western Union Brings Cash Transfers To Australia's Gas Stations - PYMNTS.com
Buy or Sell? Average Brokerage Ratings on The Western Union Company (WU), Six ...
StockNewsJournal - Jul 24, 2017
ROI deals with the invested cash in the company and the return the investor realize on that money based on the net profit of the business.
Western Union Unveils Major Upgrade of Its Digital Payments Platform for ...
Business Wire (press release) - Jun 27, 2017
LONDON--(BUSINESS WIRE)--The Western Union Company (NYSE: WU), a leader in global payments services, today announces the launch of its enhanced WU® GlobalPay for Students product, which enables academic institutions to more efficiently ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for WU to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate WU's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$19.47 Current Price

$11.12 Growth Price (DCF)

Overvalued by 42.87%


Growth Rate Assumed by Market: 11.47%


Future Free Cash Flow Growth Rate: -4.8%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$8.06 Stability Price (EPV)

Overvalued by 58.61%


Discount Rate: 15.0%

$-206.77 Book Price

Overvalued by 1,161.99%


Excellent Cash Return on Invested Capital over the past 5 years

WU has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

WU has created $43.77 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 917.10M 847.30M 866.90M 804.60M 812.10M
divided by
Invested Capital 1.63B 3.00B 1.42B 2.58B 1.93B
Cash ROIC 56.15% 28.22% 61.27% 31.17% 42.04%

Excellent Return on Equity over the past 5 years

Over the past 5 years, WU has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

WU has generated $66.92 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.03B 798.40M 852.40M 837.80M 253.20M
divided by
Stockholders' Equity 940.60M 1.10B 1.30B 1.40B 902.20M
Return on Equity 109.07% 72.27% 65.55% 59.63% 28.06%

Excellent Business Performance over the past 10 years

WU has been able to maintain profitability in good times and bad. This could mean WU has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

WU has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 911.40M 1.20B 1.19B 959.40M 1.01B 917.10M 847.30M 866.90M 804.60M 812.10M

Weak Balance Sheet

WU's financial position is not ideal. The key is to check whether WU is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 2.19B 1.30B 1.69B 2.16B - 3.29B 2.17B 4.09B 2.48B 2.11B
Current Assets 3.13B 2.50B 4.32B 4.99B - 4.89B 5.53B 5.10B 4.62B 4.63B
Total Assets 5.78B 5.58B 7.35B 7.93B - 9.47B 10.12B 9.89B 9.46B 9.42B
Current Liabilities 2.79B 1.97B 3.41B 3.51B - 4.54B 4.95B 4.39B 4.40B 5.38B
Total Liabilities 5.73B 5.59B 7.00B 7.35B - 8.53B 9.02B 8.59B 8.05B 8.52B
Stockholder' Equity 50.70M -8.10M 353.50M 582.70M 894.80M 940.60M 1.10B 1.30B 1.40B 902.20M
Current Ratio 1.12 1.27 1.27 1.42 - 1.08 1.12 1.16 1.05 0.86
TL-to-TA 0.99 1.00 0.95 0.93 - 0.90 0.89 0.87 0.85 0.90

Consistent Reinvestment of Profits over the past 10 years

WU has consistently retained profits. This may put WU in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, WU can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 453.10M 29.20M 433.20M 591.60M 760.00M 754.70M 877.30M 968.70M 977.30M 419.30M
Retained Earnings Growth - -93.56% 1,383.56% 36.57% 28.47% -0.70% 16.24% 10.42% 0.89% -57.10%

Inconsistent Net Profit Margins over the past 10 years

WU potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$13.68 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 857.30M 919.00M 848.80M 909.90M - 1.03B 798.40M 852.40M 837.80M 253.20M
divided by
Revenue 4.90B 5.28B 5.08B 5.19B 5.49B 5.66B 5.54B 5.61B 5.48B 5.42B
Net Profit Margin 17.50% 17.40% 16.70% 17.52% - 18.11% 14.41% 15.20% 15.28% 4.67%

Inconsistent Gross Profit Margins over the past 10 years

WU has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$37.80 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 2.09B 2.19B 2.21B 2.21B - 2.47B 2.31B 2.31B 2.28B 2.15B
divided by
Revenue 4.90B 5.28B 5.08B 5.19B 5.49B 5.66B 5.54B 5.61B 5.48B 5.42B
Gross Margin 42.69% 41.44% 43.45% 42.64% - 43.61% 41.63% 41.19% 41.66% 39.70%

Medium Capital Intensity over the past 10 years

WU has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

26.14% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 192.10M 53.90M 27.30M 35.00M 162.50M 268.20M 241.30M 179.00M 266.50M 229.80M
divided by
Net Income 857.30M 919.00M 848.80M 909.90M - 1.03B 798.40M 852.40M 837.80M 253.20M
Capital Expenditure Ratio 22.41% 5.87% 3.22% 3.85% - 26.14% 30.22% 21.00% 31.81% 90.76%

Very Strong Dividend History over the past 10 years

WU has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests WU is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 30.00M 28.40M 41.20M 165.30M 194.20M 254.20M 277.20M 265.20M 316.50M 312.20M
divided by
Shares Outstanding 772.90M 738.20M 701.00M 668.90M 634.20M 607.40M 559.70M 536.80M 516.70M 493.50M
Dividend Paid Per Share 0.04 0.04 0.06 0.25 0.31 0.42 0.50 0.49 0.61 0.63
Price at Year End 23.07 13.62 18.43 18.24 18.26 13.38 17.24 18.01 18.24 21.72
Dividend Yield 0.17% 0.28% 0.32% 1.35% 1.68% 3.13% 2.87% 2.74% 3.36% 2.91%

Strong History of Stock Buybacks over the past 10 years

WU has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 772.90M 738.20M 701.00M 668.90M 634.20M 607.40M 559.70M 536.80M 516.70M 493.50M
Stock Bought Back - 4.70% 5.31% 4.80% 5.47% 4.41% 8.52% 4.27% 3.89% 4.70%
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