4-Star Stocks Poised to Pop: Western Union

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, money-transfer giant Western Union (NYSE: WU  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Western Union's business and see what CAPS investors are saying about the stock right now.

Western Union facts

Headquarters (founded)

Englewood, Colo. (1851)

Market Cap

$10.8 billion

Industry

Data processing and outsourced services

Trailing-12-Month Revenue

$5.7 billion

Management

CEO Hikmet Ersek (since 2010)
CFO Scott Scheirman (since 2006)

Return on Capital (average, past 3 years)

21.9%

Cash/Debt

$1.4 billion/$3.7 billion

Dividend Yield

2.2%

Competitors

American Express Company (NYSE: AXP  )
Moneygram International
(NYSE: MGI  )
PayPal

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 1,512 members who have rated Western Union believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, Gordogato, succinctly summed up the bull case for our community:

Western Union is profitable and pays a small dividend, though their stock price has gone nowhere lately. Sooner or later, the market will take notice. Good margins, return on assets, and cash flow. ... I sometimes worry that Western Union could be left in the dust if Internet-based, international money transfers become easy and a disruptor company moves into this space. But [Western Union's] moat is its worldwide network of physical branches. Rich, western nations might try to move toward a cashless society, but worldwide, the need to convert electronic money into physical currency is not going away anytime soon, and neither is Western Union.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Western Union may not be your top choice.

If that's the case, we've compiled a special free report for investors called "The 3 Dow Stocks Dividend Investors Need," which uncovers a few other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has the following options: short OCT 2012 $55.00 puts on American Express Company, short OCT 2012 $60.00 calls on American Express Company, and long OCT 2012 $65.00 calls on American Express Company. Motley Fool newsletter services recommend American Express Company and Western Union. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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