Why Western Union Is Ready to Rebound

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 and see what CAPS investors are saying about the stock right now.

Western Union facts

 

 

Headquarters (founded)

Englewood, Colo. (1851)

Market Cap

$8.9 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)

21.6%

Cash/Debt

$1.4 billion/$3.4 billion

Dividend Yield

3.5%

Competitors

American Express (NYSE: AXP  )

Moneygram International (NASDAQ: MGI  )

PayPal

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

On CAPS, 97% of the 1,638 members who have rated Western Union believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, 20 punches, tapped the stock as a particularly attractive bargain opportunity:

[Western Union's] business model has come into question due to threats from new technology, but I think [Western Union] is more stable than people realize, and this firesale price offers a margin of safety in case that assumption is not as correct as I'm hoping.

[Western Union] is a CONSISTENT CASH FOUNTAIN, with very high market share, huge returns on equity, a great dividend, and the capacity for HUGE share buybacks.

Earnings yield is about 14%, and free cash flow yield is about 11%.

I'm a tad late on this one, but I think it'll still pan out just fine. Heads I win, tails I don't lose much.

If you want market-thumping returns, you need to put together the best portfolio you can. 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 "Secure Your Future With 9 Rock-Solid Dividend Stocks," which uncovers several other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.


Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.


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