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Why Western Union Will Keep Crawling Back

By Brian D. Pacampara, CFA - Apr 17, 2013 at 10:37AM

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Market-trouncing returns could be written in these four stars.

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 (WU 0.47%) 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

Englewood, Colo. (1851)

Market Cap

$8.5 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)

21.2%

Cash / Debt

$1.8 billion / $4.0 billion

Dividend Yield

3.3%

Competitors

American Express
Moneygram International

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

On CAPS, 97% of the 1,641 members who have rated Western Union believe the stock will outperform the S&P 500 going forward.

Earlier this week, one of those Fools, compustat, succinctly summed up the Western Union bull case for our community:

[Western Union] has a admirable competitive advantage that is derived from its business model that takes full advantage of the network effect. As the company ties up loose ends regarding its misstep in Mexico and regulatory issues play out, this stock will be back on track. Very cheap valuation given its future prospects and sustainable moat.

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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Stocks Mentioned

The Western Union Company Stock Quote
The Western Union Company
WU
$17.07 (0.47%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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