By
Brian D. Pacampara
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More Articles
August 18, 2011
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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, money transfer agent Western Union (NYSE: WU ) has earned a coveted five-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 |
$10.6 billion |
| Industry |
Data processing and outsourced services |
| Trailing-12-Month Revenue |
$5.34 billion |
| Management |
CEO Hikmet Ersek (since 2010)
CFO Scott Scheirman (since 2006)
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| Return on Capital (Average, Past 3 Years) |
23.9% |
| Cash/Debt |
$2.1 billion / $3.6 billion |
| Dividend Yield |
1.9% |
| Competitors |
American Express (NYSE: AXP )
Global Payments (NYSE: GPN )
Moneygram International (NYSE: MGI )
|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 1,503 members who have rated Western Union believe the stock will outperform the S&P 500 going forward. These bulls include gweech and ArfytheSeal.
Earlier this year, gweech nicely summed up the Western Union bull case:
The de facto standard for shipping money all over the world. Not everyone has a paypal account nor will everyone get one. The vast majority of people receiving remittances in developing countries rely on Western Union.
Currently, Western Union even sports a cheapish forward P/E of 9.8. That represents a discount to rivals American Express (11.1), Global Payments (12.7), and Moneygram (17.5).
CAPS member ArfytheSeal elaborates on the bargain opportunity:
The firm is one of only two major money transfer services. I like the fact that it weathered the great recession well, barely missing a beat in the 08-09 timeframe. [Year-to-date] there is moderate growth while valuation is truly compelling, with a forward p/e ratio not far over 10x.
What do you think about Western Union, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track Western Union? Add it to your watchlist.
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