WESTERN UNION CO (WU) Stock Fundamental Analysis
NYSE:WU - New York Stock Exchange, Inc. - US9598021098 - Common Stock - Currency: USD
Taking everything into account, WU scores 6 out of 10 in our fundamental rating. WU was compared to 101 industry peers in the Financial Services industry. While WU has a great profitability rating, there are some minor concerns on its financial health. WU is cheap, but on the other hand it scores bad on growth. Finally WU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
WU had positive earnings in the past year.
In the past year WU had a positive cash flow from operations.
Each year in the past 5 years WU has been profitable.
In the past 5 years WU always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.97%, WU belongs to the top of the industry, outperforming 92.08% of the companies in the same industry.
WU has a Return On Equity of 97.40%. This is amongst the best in the industry. WU outperforms 99.01% of its industry peers.
WU's Return On Invested Capital of 8.06% is fine compared to the rest of the industry. WU outperforms 78.22% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WU is in line with the industry average of 11.69%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.97% | ||
| ROE | 97.4% | ||
| ROIC | 8.06% |
ROA(3y)9.84%
ROA(5y)9.3%
ROE(3y)139.23%
ROE(5y)208.46%
ROIC(3y)9.8%
ROIC(5y)10.63%
1.3 Margins
WU has a Profit Margin of 22.08%. This is in the better half of the industry: WU outperforms 79.21% of its industry peers.
WU's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 17.82%, WU is doing good in the industry, outperforming 64.36% of the companies in the same industry.
In the last couple of years the Operating Margin of WU has grown nicely.
WU's Gross Margin of 37.62% is in line compared to the rest of the industry. WU outperforms 54.46% of its industry peers.
In the last couple of years the Gross Margin of WU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.82% | ||
| PM (TTM) | 22.08% | ||
| GM | 37.62% |
OM growth 3Y-6.29%
OM growth 5Y3.95%
PM growth 3Y11.78%
PM growth 5Y2.1%
GM growth 3Y-3.75%
GM growth 5Y-1.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WU is still creating some value.
Compared to 1 year ago, WU has less shares outstanding
WU has less shares outstanding than it did 5 years ago.
WU has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.09, we must say that WU is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.09, WU is doing good in the industry, outperforming 64.36% of the companies in the same industry.
WU has a debt to FCF ratio of 7.94. This is a slightly negative value and a sign of low solvency as WU would need 7.94 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.94, WU is in line with its industry, outperforming 57.43% of the companies in the same industry.
WU has a Debt/Equity ratio of 2.97. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 2.97, WU is not doing good in the industry: 73.27% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.97 | ||
| Debt/FCF | 7.94 | ||
| Altman-Z | 1.09 |
ROIC/WACC1.06
WACC7.57%
2.3 Liquidity
WU has a Current Ratio of 1.29. This is a normal value and indicates that WU is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of WU (1.29) is better than 60.40% of its industry peers.
WU has a Quick Ratio of 1.29. This is a normal value and indicates that WU is financially healthy and should not expect problems in meeting its short term obligations.
WU's Quick ratio of 1.29 is fine compared to the rest of the industry. WU outperforms 62.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
The earnings per share for WU have decreased by -2.84% in the last year.
Measured over the past 5 years, WU shows a small growth in Earnings Per Share. The EPS has been growing by 0.23% on average per year.
Looking at the last year, WU shows a decrease in Revenue. The Revenue has decreased by -5.15% in the last year.
The Revenue has been decreasing by -4.47% on average over the past years.
EPS 1Y (TTM)-2.84%
EPS 3Y-7.2%
EPS 5Y0.23%
EPS Q2Q%-8.89%
Revenue 1Y (TTM)-5.15%
Revenue growth 3Y-6.02%
Revenue growth 5Y-4.47%
Sales Q2Q%-6.24%
3.2 Future
The Earnings Per Share is expected to grow by 3.24% on average over the next years.
Based on estimates for the next years, WU will show a small growth in Revenue. The Revenue will grow by 1.73% on average per year.
EPS Next Y4.54%
EPS Next 2Y4.25%
EPS Next 3Y4.92%
EPS Next 5Y3.24%
Revenue Next Year-1.05%
Revenue Next 2Y0.3%
Revenue Next 3Y0.7%
Revenue Next 5Y1.73%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 5.50, the valuation of WU can be described as very cheap.
Based on the Price/Earnings ratio, WU is valued cheaper than 88.12% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.82, WU is valued rather cheaply.
A Price/Forward Earnings ratio of 4.94 indicates a rather cheap valuation of WU.
WU's Price/Forward Earnings ratio is rather cheap when compared to the industry. WU is cheaper than 87.13% of the companies in the same industry.
WU is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.5 | ||
| Fwd PE | 4.94 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WU indicates a rather cheap valuation: WU is cheaper than 95.05% of the companies listed in the same industry.
78.22% of the companies in the same industry are more expensive than WU, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.84 | ||
| EV/EBITDA | 4.75 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.21
PEG (5Y)23.88
EPS Next 2Y4.25%
EPS Next 3Y4.92%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.61%, WU is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.87, WU pays a better dividend. On top of this WU pays more dividend than 94.06% of the companies listed in the same industry.
WU's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.61% |
5.2 History
The dividend of WU has a limited annual growth rate of 3.31%.
WU has been paying a dividend for at least 10 years, so it has a reliable track record.
WU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.31%
Div Incr Years0
Div Non Decr Years17
5.3 Sustainability
WU pays out 35.33% of its income as dividend. This is a sustainable payout ratio.
WU's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.33%
EPS Next 2Y4.25%
EPS Next 3Y4.92%
9.4
-0.23 (-2.39%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners94.15%
Inst Owner Change0.25%
Ins Owners0.22%
Ins Owner Change7.44%
Market Cap3.11B
Analysts46.67
Price Target11.19 (19.04%)
Short Float %8.01%
Short Ratio3.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.61% |
Yearly Dividend0.93
Dividend Growth(5Y)3.31%
DP35.33%
Div Incr Years0
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.22%
Min EPS beat(2)-6.98%
Max EPS beat(2)-1.46%
EPS beat(4)1
Avg EPS beat(4)-2.71%
Min EPS beat(4)-6.98%
Max EPS beat(4)2.03%
EPS beat(8)4
Avg EPS beat(8)3.62%
EPS beat(12)6
Avg EPS beat(12)4.95%
EPS beat(16)9
Avg EPS beat(16)6.07%
Revenue beat(2)1
Avg Revenue beat(2)-1.87%
Min Revenue beat(2)-3.95%
Max Revenue beat(2)0.21%
Revenue beat(4)1
Avg Revenue beat(4)-2.09%
Min Revenue beat(4)-3.95%
Max Revenue beat(4)0.21%
Revenue beat(8)4
Avg Revenue beat(8)0.4%
Revenue beat(12)5
Avg Revenue beat(12)-0.23%
Revenue beat(16)5
Avg Revenue beat(16)-0.91%
PT rev (1m)-5.51%
PT rev (3m)-9.7%
EPS NQ rev (1m)-1.41%
EPS NQ rev (3m)-2.16%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-0.58%
Revenue NQ rev (1m)-0.28%
Revenue NQ rev (3m)-0.46%
Revenue NY rev (1m)-0.4%
Revenue NY rev (3m)-1.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.5 | ||
| Fwd PE | 4.94 | ||
| P/S | 0.75 | ||
| P/FCF | 8.84 | ||
| P/OCF | 6.75 | ||
| P/B | 3.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.75 |
EPS(TTM)1.71
EY18.19%
EPS(NY)1.9
Fwd EY20.23%
FCF(TTM)1.06
FCFY11.32%
OCF(TTM)1.39
OCFY14.82%
SpS12.54
BVpS2.84
TBVpS-4.3
PEG (NY)1.21
PEG (5Y)23.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.97% | ||
| ROE | 97.4% | ||
| ROCE | 10.06% | ||
| ROIC | 8.06% | ||
| ROICexc | 9.68% | ||
| ROICexgc | N/A | ||
| OM | 17.82% | ||
| PM (TTM) | 22.08% | ||
| GM | 37.62% | ||
| FCFM | 8.48% |
ROA(3y)9.84%
ROA(5y)9.3%
ROE(3y)139.23%
ROE(5y)208.46%
ROIC(3y)9.8%
ROIC(5y)10.63%
ROICexc(3y)12.09%
ROICexc(5y)13.01%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)12.02%
ROCE(5y)13.02%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.63%
ROICexc growth 5Y-2.69%
OM growth 3Y-6.29%
OM growth 5Y3.95%
PM growth 3Y11.78%
PM growth 5Y2.1%
GM growth 3Y-3.75%
GM growth 5Y-1.35%
F-Score5
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.97 | ||
| Debt/FCF | 7.94 | ||
| Debt/EBITDA | 3.06 | ||
| Cap/Depr | 62.44% | ||
| Cap/Sales | 2.63% | ||
| Interest Coverage | 6.34 | ||
| Cash Conversion | 50.44% | ||
| Profit Quality | 38.43% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 1.09 |
F-Score5
WACC7.57%
ROIC/WACC1.06
Cap/Depr(3y)67.05%
Cap/Depr(5y)58.3%
Cap/Sales(3y)2.81%
Cap/Sales(5y)2.47%
Profit Quality(3y)62.33%
Profit Quality(5y)81.9%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.84%
EPS 3Y-7.2%
EPS 5Y0.23%
EPS Q2Q%-8.89%
EPS Next Y4.54%
EPS Next 2Y4.25%
EPS Next 3Y4.92%
EPS Next 5Y3.24%
Revenue 1Y (TTM)-5.15%
Revenue growth 3Y-6.02%
Revenue growth 5Y-4.47%
Sales Q2Q%-6.24%
Revenue Next Year-1.05%
Revenue Next 2Y0.3%
Revenue Next 3Y0.7%
Revenue Next 5Y1.73%
EBIT growth 1Y-9.82%
EBIT growth 3Y-11.93%
EBIT growth 5Y-0.7%
EBIT Next Year25.62%
EBIT Next 3Y8.99%
EBIT Next 5Y7.4%
FCF growth 1Y-7.25%
FCF growth 3Y-32.58%
FCF growth 5Y-19.17%
OCF growth 1Y-11.25%
OCF growth 3Y-27.02%
OCF growth 5Y-14.98%