The Western Union Company (WU) Shares: Are They Risky Or Cheap?

The Western Union Company (NYSE:WU) finished Tuesday with an addition of $0.08 to close at $20.58, an upside of 0.39 percent. An average of 3,982,540 shares of common stock have been traded in the last five days. There was a fall of -$0.20 in the past week. The last 20 days have seen an average of 5,027,425 shares traded, while the 50-day average volume stands at 3,957,884.

WU stock has decreased by -4.32% in the last month. The company shares reached their 1-month lowest point of $19.81 on 09/21/21. With the stock rallying to its 52-week high on 04/26/21, shares of the company touched a low of $19.07 and a high of $26.61 in 52 weeks. In spite of this, the price is down -22.66% from the 52-week high.

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Insider Transactions

57 days have passed since The Western Union Company (WU) last reported insider trading activity. Summerill Andrew, who is President, Payments, most recently acquired $1,239 shares at $22.66 per share on Aug 11. In this transaction, the insider spent $28,076. CFO, Agrawal Rajesh K., disposed of 2,129 shares at a price of $25.00 on May 18. The insider now owns more than $53,225 worth of shares. Prior to that, CFO Agrawal Rajesh K. went on to Sale 109,510 shares at $24.95 each on May 17. An amount of $2,732,070 was transacted.

Valuation Metrics

The Western Union Company (WU) has a trailing price-to-earnings (P/E) ratio of 10.51, which compares with the 14.40 for the broader industry and 12.73 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, The Western Union Company’s PE ratio has ranged between 50.64 and 7.097. The stock’s beta is 1.01. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.64, the price-to-book (PB) ratio at 29.40, and the price-to-cash flow ratio at 17.83.

The Western Union Company pays a $0.94 dividend per share annually. It offers a dividend yield of 4.57%. The company has a payout ratio of 46.70%. The company’s most recent quarterly dividend payment took place on Sep. 30, and it was $0.2350 a share, without any change from last year. Its dividend has been increased for the last 14 consecutive years with the latest increase dividend $0.01 reported on Wednesday February 10 2021. Dividends have grown by 28.57% each year over the last three years.

The Western Union Company will next go ex-dividend on 20-Dec. The next dividend payment The Western Union Company will make is expected to be $0.235.

Further, the company has a long term debt to equity ratio of 9.54 and a total debt to equity ratio of 10.47 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 41.90% against a 5-year average of 40.7%. Its gross profit as reported stood at $2.01 billion compared to revenue of $4.83 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, The Western Union Company’s return on assets was 8.90%, compared to 5.2% over the last five years. For the broader industry, ROE averaged 16.40 over the past year.

Earnings Surprise

The analyst consensus anticipated The Western Union Company’s latest quarter earnings to come in at $0.48 per share, but it turned out to be $0.48, a 0.00% surprise. For the quarter, EBITDA amounted to $310.5 million. Shareholders own equity worth $406.35 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at The Western Union Company (WU) price momentum. RSI 9-day as of the close on 05 October was 46.88%, suggesting the stock is Neutral, with historical volatility in this time frame at 20.10%.

As of today, WU’s price is $20.47 -0.96% or -$0.20 from its 5-day moving average. WU is currently trading -4.15% lower than its 20-day SMA and -17.22% lower than its 100-day SMA. However, the stock’s current price level is -11.86% below the SMA50 and -9.62% below the SMA200.

The stochastic %K and %D were 44.21% and 38.58%, respectively, and the average true range (ATR) was 0.47. With the 14-day stochastic at 50.66% and the average true range at 0.46, the RSI (14) stands at 43.83%. The stock has reached 0.00 on the 9-day MACD Oscillator while the 14-day reading was at 0.10.

Analyst Ratings

Citigroup upgraded The Western Union Company (NYSE: WU) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a a Neutral.The consensus rating for The Western Union Company (WU) among analysts is Hold. According to current brokerage recommendations, 4 brokerage firms advise that investors sell WU, while 12 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 5 others rate it as a “buy”.

What is WU’s price target for the next 12 months?

Analysts predict a range of price targets between $21.00 and $32.00, with a median target of $25.50. Taking a look at these predictions, the average price target given by analysts for The Western Union Company (WU) stock is $26.00.


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