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Western Union Stock: Hold for the Yield, But Watch the Risks
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The Western Union Company (WU - Free Report) , a longstanding leader in global payments, continues to offer robust money transfer and payment solutions. The company is leveraging rising transaction volumes and resilience in its Branded Digital business to position itself for future growth. Strong performance in Latin America, the Caribbean, Europe, and the CIS region is fueling expansion in its Consumer Money Transfer segment.
Headquartered in Denver, CO, Western Union holds a market capitalization of $3.1 billion. Year to date, its shares have plunged 11.3%, underperforming the broader industry, which posted a 3.5% gain. However, the stock now appears attractively valued, trading at a forward 12-month price-to-earnings ratio of just 5.18X, well below the industry average of 22.77X.
Zacks Estimates for WU
Analyst sentiment reflects modest optimism. The Zacks Consensus Estimate for current-year earnings stands at $1.77 per share, a 1.7% increase over the prior year. Western Union has exceeded earnings estimates in two of the last four quarters, matched once, and missed once, with an average earnings surprise of 0.6%.
Revenue prospects remain steady. The consensus mark for 2025 revenue is approximately $4.12 billion, with the Consumer Services segment expected to be a key contributor. Our model suggests the unit’s revenue could grow by nearly 18% year over year.
Growth Drivers
Western Union continues to strengthen its service offerings through strategic collaborations with fintech firms and financial institutions. Innovations like the "Send Now, Pay Later" product, which merges remittance with lending, are designed to increase market penetration. The company’s extensive global network further enhances its reach and competitive position.
Investor appeal is also supported by a strong dividend profile. Western Union currently offers a dividend yield of 10%, significantly higher than the industry average of 0.6%. In the first quarter of 2025, the company returned $159 million to shareholders through $82.3 million in dividends and $76.7 million in share buybacks. As of March 31, 2025, $925 million remained authorized for repurchase. In 2024, WU returned $496 million to shareholders, underscoring its commitment to delivering value.
Risks to Watch
Despite its strengths, Western Union faces notable headwinds. Its balance sheet is highly leveraged, with a total debt-to-capital ratio of 74.8% as of the first-quarter end, well above the industry average of 42.7%. Additionally, rising competition from low-cost digital payment platforms poses a significant threat to its long-term market share.
Even so, with a Zacks Rank #3 (Hold) and a clear strategic roadmap, Western Union appears to be a stock worth holding. While debt and digital disruption remain risks, the company’s innovations, strong dividend yield, and international growth potential offer reasons for cautious optimism.
The Zacks Consensus Estimate for Shift4 Payments’ 2025 earnings is currently pegged at $5.58 per share, indicating 43.4% year-over-year growth. It beat estimates in three of the past four quarters and missed once, with an average surprise of 16.8%. The consensus mark for Shift4 Payments’ revenues of $1.7 billion suggests a 26.1% increase from the year-ago level.
The Zacks Consensus Estimate for Paysafe’s current-year earnings is now pegged at $2.38 per share, indicating 11.2% year-over-year growth. The consensus mark for PSFE’s revenues of $1.7 billion suggests a 1% increase from the year-ago level.
The Zacks Consensus Estimate for Paysign’s 2025 earnings of 33 cents per share suggests 371.4% year-over-year growth. The consensus estimate for PAYS’s current-year revenues is pegged at $72.1 million, indicating a 23.5% increase from a year ago.
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Western Union Stock: Hold for the Yield, But Watch the Risks
The Western Union Company (WU - Free Report) , a longstanding leader in global payments, continues to offer robust money transfer and payment solutions. The company is leveraging rising transaction volumes and resilience in its Branded Digital business to position itself for future growth. Strong performance in Latin America, the Caribbean, Europe, and the CIS region is fueling expansion in its Consumer Money Transfer segment.
Headquartered in Denver, CO, Western Union holds a market capitalization of $3.1 billion. Year to date, its shares have plunged 11.3%, underperforming the broader industry, which posted a 3.5% gain. However, the stock now appears attractively valued, trading at a forward 12-month price-to-earnings ratio of just 5.18X, well below the industry average of 22.77X.
Zacks Estimates for WU
Analyst sentiment reflects modest optimism. The Zacks Consensus Estimate for current-year earnings stands at $1.77 per share, a 1.7% increase over the prior year. Western Union has exceeded earnings estimates in two of the last four quarters, matched once, and missed once, with an average earnings surprise of 0.6%.
The Western Union Company Price and EPS Surprise
The Western Union Company price-eps-surprise | The Western Union Company Quote
Revenue prospects remain steady. The consensus mark for 2025 revenue is approximately $4.12 billion, with the Consumer Services segment expected to be a key contributor. Our model suggests the unit’s revenue could grow by nearly 18% year over year.
Growth Drivers
Western Union continues to strengthen its service offerings through strategic collaborations with fintech firms and financial institutions. Innovations like the "Send Now, Pay Later" product, which merges remittance with lending, are designed to increase market penetration. The company’s extensive global network further enhances its reach and competitive position.
Investor appeal is also supported by a strong dividend profile. Western Union currently offers a dividend yield of 10%, significantly higher than the industry average of 0.6%. In the first quarter of 2025, the company returned $159 million to shareholders through $82.3 million in dividends and $76.7 million in share buybacks. As of March 31, 2025, $925 million remained authorized for repurchase. In 2024, WU returned $496 million to shareholders, underscoring its commitment to delivering value.
Risks to Watch
Despite its strengths, Western Union faces notable headwinds. Its balance sheet is highly leveraged, with a total debt-to-capital ratio of 74.8% as of the first-quarter end, well above the industry average of 42.7%. Additionally, rising competition from low-cost digital payment platforms poses a significant threat to its long-term market share.
Even so, with a Zacks Rank #3 (Hold) and a clear strategic roadmap, Western Union appears to be a stock worth holding. While debt and digital disruption remain risks, the company’s innovations, strong dividend yield, and international growth potential offer reasons for cautious optimism.
Key Picks
Investors interested in the broader Business Services space can look at some better-ranked stocks like Shift4 Payments (FOUR - Free Report) , Paysafe Limited (PSFE - Free Report) and Paysign (PAYS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Shift4 Payments’ 2025 earnings is currently pegged at $5.58 per share, indicating 43.4% year-over-year growth. It beat estimates in three of the past four quarters and missed once, with an average surprise of 16.8%. The consensus mark for Shift4 Payments’ revenues of $1.7 billion suggests a 26.1% increase from the year-ago level.
The Zacks Consensus Estimate for Paysafe’s current-year earnings is now pegged at $2.38 per share, indicating 11.2% year-over-year growth. The consensus mark for PSFE’s revenues of $1.7 billion suggests a 1% increase from the year-ago level.
The Zacks Consensus Estimate for Paysign’s 2025 earnings of 33 cents per share suggests 371.4% year-over-year growth. The consensus estimate for PAYS’s current-year revenues is pegged at $72.1 million, indicating a 23.5% increase from a year ago.