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Is Western Union (WU) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Western Union (WU - Free Report) . WU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.76, while its industry has an average P/E of 27.03. Over the past year, WU's Forward P/E has been as high as 14.52 and as low as 8.53, with a median of 10.85.

WU is also sporting a PEG ratio of 1.12. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WU's PEG compares to its industry's average PEG of 1.81. Over the past 52 weeks, WU's PEG has been as high as 3.27 and as low as 1.10, with a median of 2.22.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. WU has a P/S ratio of 2.11. This compares to its industry's average P/S of 4.91.

Finally, investors will want to recognize that WU has a P/CF ratio of 8.31. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.14. WU's P/CF has been as high as 31.36 and as low as 5.87, with a median of 7.32, all within the past year.

These are just a handful of the figures considered in Western Union's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that WU is an impressive value stock right now.


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