Reviewing Western Union (WU) and The Competition

Western Union (NYSE:WU) is one of 341 public companies in the “Financial Services” industry, but how does it weigh in compared to its rivals? We will compare Western Union to related companies based on the strength of its institutional ownership, profitability, earnings, risk, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

91.8% of Western Union shares are owned by institutional investors. Comparatively, 43.0% of shares of all “Financial Services” companies are owned by institutional investors. 3.3% of Western Union shares are owned by company insiders. Comparatively, 21.9% of shares of all “Financial Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Western Union and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	8.32%	48.63%	5.55%
Western Union Competitors	-412.58%	-39.71%	-5.80%

Volatility and Risk

Western Union has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Western Union’s rivals have a beta of 2.51, meaning that their average stock price is 151% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Western Union and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	7	7	0	0	1.50
Western Union Competitors	1983	6927	11685	444	2.50

Western Union presently has a consensus price target of $6.95, indicating a potential downside of 0.14%. As a group, “Financial Services” companies have a potential downside of 6.45%. Given Western Union’s higher probable upside, equities analysts plainly believe Western Union is more favorable than its rivals.

Dividends

Western Union pays an annual dividend of $0.94 per share and has a dividend yield of 13.5%. Western Union pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Financial Services” companies pay a dividend yield of 4.2% and pay out -72.8% of their earnings in the form of a dividend.

Valuation & Earnings

This table compares Western Union and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Western Union	$4.05 billion	$499.60 million	5.66
Western Union Competitors	$11.46 billion	$1.09 billion	7.63

Western Union’s rivals have higher revenue and earnings than Western Union. Western Union is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Western Union rivals beat Western Union on 9 of the 15 factors compared.

Western Union Company Profile

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.