The Western Union Company (NYSE:WU) has been under the scanner of various ratings firms who have assigned a “Reduce” rating to the stock. Bloomberg.com reports that seventeen firms are currently covering the company, out of which seven have rated the stock as a sell, while six others have issued a hold rating on it. These ratings rely on the average 12 month price target among brokerages that have updated their coverage in the past year and stands at $14.23.
The Western Union Co is mainly involved in offering payment and money transfer services through its business segments – Consumer-to-Consumer, Business Solutions, and Other. The former deals with facilitating money transfers between two consumers while the Business Solutions segment caters to foreign exchange transactions for small and medium-sized enterprises as well as individuals and organizations.
Shares of WU stocks opened at $11.04 on Friday, suggesting a struggling performance by the company. Its debt-to-equity ratio stands high at 5.48 indicating an imbalance between borrowing funds from creditors and financing operations through equity contributions. Similarly, Western Union’s PE ratio stands at 4.72 suggestive of low investor confidence in its future earnings potential whereas its beta value is 0.87.
Overall, Western Union appears to be going through a challenging phase as reflected by its stock prices over the last year which ranged between $10.07 (its one-year low) and $19.97 (its one-year high). While it would be interesting to observe how it fares in the near future amidst rising competition by new entrants in this domain such as PayPal and TransferWise, it would be wise for investors to proceed with caution when making decisions about buying shares given its present position in the market.
Western Union in the Headlines: Mixed Investor Views and Recent Changes
In the financial world, the Western Union Company has recently made headlines due to various reports and changes in investor positions. Several equities analysts have issued reports on WU shares, including Barclays and Goldman Sachs Group, who both decreased their price objectives for the company. Additionally, StockNews.com assumed coverage on Western Union and issued a “hold” rating.
Despite this news, large investors have made changes to their positions in the stock. Fiera Capital Corp raised its stake by 17%, while MQS Management LLC bought a new stake in the company. Marshall Wace LLP raised its stake by 125.1%, and Sigma Planning Corp increased its position by 2.3%. Institutional investors and hedge funds own almost 98% of Western Union’s stock.
So what does Western Union do? It is a holding company that provides money transfer and payment services through various segments. Its Consumer-to-Consumer segment facilitates money transfers between two consumers, while its Business Solutions segment offers payment and foreign exchange solutions to small and medium-sized enterprises and other organizations.
In February, Western Union announced quarterly earnings results which missed analysts’ consensus estimates of $0.35 EPS by $0.03. The company reported $1.09 billion revenue for the quarter, down 15% compared to the same period last year.
Despite this news, Western Union recently disclosed a quarterly dividend of $0.235 which will be paid to shareholders on March 31st. This represents an annualized dividend of $0.94 with a yield of 8.51%.
Overall, it seems that there are mixed opinions about Western Union in the financial world at present with some investors raising their stakes while others decrease price objectives for the company. Investors will be watching closely to see how things turn out for Western Union in the long run.
