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Here's Why You Should Retain Western Union (WU) Stock Now
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The Western Union Company (WU - Free Report) is currently riding on a robust digital platform, numerous collaborations and strong financial position. An optimistic 2021 outlook further reinforces growth prospects of the stock.
Zacks Rank & Price Performance
Western Union carries a Zacks Rank #3 (Hold), at present.
The stock has lost 3.1% year to date compared with the industry’s and Business Services sector’s decline of 10.3% and 17.2%, respectively.
Image Source: Zacks Investment Research
Style Score
The company is positioned well for progress, as evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.
It has an impressive Value Score of A, which reflects an attractive valuation of the stock.
Robust Prospects
The Zacks Consensus Estimate for the company’s 2021 earnings indicate improvement of 11.2% from the prior-year’s reported figure. The consensus mark for 2021 revenues reflects growth of 6.5% from the year-ago reported number.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has moved north by 1% in the past 30 days.
Impressive Earnings Surprise History
Western Union beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 7.08%.
Strong 2021 Guidance
Western Union has a solid 2021 guidance in place. Earnings per share is estimated between $2 and $2.10, the mid-point of which reflects improvement of 9.6% from the 2020-end reported figure. Also, the mid-point lies lower than the Zacks Consensus Estimate of $2.08 per share.
On a constant currency (cc) basis, the company anticipates mid-single digit growth in revenues for 2021. The projection for the metric compares favorably with the year-ago decline of 3% in revenues on a cc basis.
Business Tailwinds
The company boasts of a robust digital arm, which is a culmination of massive investments and partnerships. The arm has not only fetched solid digital revenues but also proved to be of great use for money transfers amid the coronavirus outbreak. Time and again, Western Union has joined forces with well-established financial service providers worldwide to bolster its digital capabilities, better management of international payments and expanding global presence. It anticipates digital money transfer revenues to attain roughly $1 billion this year, up from the last year wherein the metric crossed the $850 million mark.
The company remains the preferred choice for partners owing to a robust network covering several bank accounts, digital wallets and cards, over 550,000 retail locations and a diversified customer base.
Western Union has been undertaking divestitures aimed at streamlining business operations and intensifying focus on its core business areas. Recently, the company inked a deal with Goldfinch Partners and The Baupost Group to sell its Business Solutions segment, which contributed a meager 7% to the company’s overall revenues during the last 12 months ended Jun 30, 2021. Through the move, the company intends to delve deeper into the global cross-border consumer payments market and enhance its total addressable market. Besides, it has pursued several cost-cutting efforts as a result of which the company remains well on track to achieve annual cost savings of $150 million by 2022.
The company boasts of a strong liquidity position, a solid cash balance and declining debt levels. It has robust cash generating abilities in pace, which have enabled Western Union to undertake numerous growth-linked initiatives and prudently deploy capital. This year, management approved a 4% hike in the quarterly dividend. Its dividend yield of 4.4% compares favorably with the industry’s figure of 0.5%. Also, the company’s leverage ratio has been improving.
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Here's Why You Should Retain Western Union (WU) Stock Now
The Western Union Company (WU - Free Report) is currently riding on a robust digital platform, numerous collaborations and strong financial position. An optimistic 2021 outlook further reinforces growth prospects of the stock.
Zacks Rank & Price Performance
Western Union carries a Zacks Rank #3 (Hold), at present.
The stock has lost 3.1% year to date compared with the industry’s and Business Services sector’s decline of 10.3% and 17.2%, respectively.
Image Source: Zacks Investment Research
Style Score
The company is positioned well for progress, as evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.
It has an impressive Value Score of A, which reflects an attractive valuation of the stock.
Robust Prospects
The Zacks Consensus Estimate for the company’s 2021 earnings indicate improvement of 11.2% from the prior-year’s reported figure. The consensus mark for 2021 revenues reflects growth of 6.5% from the year-ago reported number.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has moved north by 1% in the past 30 days.
Impressive Earnings Surprise History
Western Union beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 7.08%.
Strong 2021 Guidance
Western Union has a solid 2021 guidance in place. Earnings per share is estimated between $2 and $2.10, the mid-point of which reflects improvement of 9.6% from the 2020-end reported figure. Also, the mid-point lies lower than the Zacks Consensus Estimate of $2.08 per share.
On a constant currency (cc) basis, the company anticipates mid-single digit growth in revenues for 2021. The projection for the metric compares favorably with the year-ago decline of 3% in revenues on a cc basis.
Business Tailwinds
The company boasts of a robust digital arm, which is a culmination of massive investments and partnerships. The arm has not only fetched solid digital revenues but also proved to be of great use for money transfers amid the coronavirus outbreak. Time and again, Western Union has joined forces with well-established financial service providers worldwide to bolster its digital capabilities, better management of international payments and expanding global presence. It anticipates digital money transfer revenues to attain roughly $1 billion this year, up from the last year wherein the metric crossed the $850 million mark.
The company remains the preferred choice for partners owing to a robust network covering several bank accounts, digital wallets and cards, over 550,000 retail locations and a diversified customer base.
Western Union has been undertaking divestitures aimed at streamlining business operations and intensifying focus on its core business areas. Recently, the company inked a deal with Goldfinch Partners and The Baupost Group to sell its Business Solutions segment, which contributed a meager 7% to the company’s overall revenues during the last 12 months ended Jun 30, 2021. Through the move, the company intends to delve deeper into the global cross-border consumer payments market and enhance its total addressable market. Besides, it has pursued several cost-cutting efforts as a result of which the company remains well on track to achieve annual cost savings of $150 million by 2022.
The company boasts of a strong liquidity position, a solid cash balance and declining debt levels. It has robust cash generating abilities in pace, which have enabled Western Union to undertake numerous growth-linked initiatives and prudently deploy capital. This year, management approved a 4% hike in the quarterly dividend. Its dividend yield of 4.4% compares favorably with the industry’s figure of 0.5%. Also, the company’s leverage ratio has been improving.
Stocks to Consider
Some better-ranked stocks in the financial transaction services space include EVERTEC, Inc. (EVTC - Free Report) , Green Dot Corporation (GDOT - Free Report) and Equifax Inc. (EFX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EVERTEC, Green Dot and Equifax have a trailing four-quarter earnings surprise of 28.42%, 64.53% and 17.71%, on average, respectively.