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Dividend Yield
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.
Weekly Dividend Stock Ideas Researched by The
Dividend Yield Weekly
. Our weekly Dividend Idea is the global payment services stock
Western Union (
WU
).
The money transfer company was sold-off by many investors after
the disappointing the third-quarter results of the company. The
company announced a 1% increase in sales and raised dividends by 25
percent and increased share buybacks to $750 million, but lowered
the guidance in accordance to lower second-half revenues and a
higher competition. The stock dropped around thirty percent and the
current dividend yield after the dividend hike is over 4% at a P/E
ratio of less than 7. Morningstar analysts estimated the fair value
of the company at $25.0 which represents a potential to double.
We like the high integration and acceptation level of the
company as well as the huge global diversification. Only 38% of the
company's sales come from the United States, 28.31% from Europe and
27.18% from Asia. The business profile has a high degree of scale
economics; Low investments are needed. Western Union generates
$1.18 billion in net cash of which only $162 million were used for
investments. The high free cash-flow of roughly $1.0 billion was
mostly spend for dividends ($194 million) and share buybacks ($804
million). Here is a snapshot of the stock:
The Western Union Company (Western Union) is engaged in money
movement and payment services. The Company's business payments
service provides consumers and businesses with options for making
one-time or recurring bill payments, including business-to-business
payment transactions, which are primarily cross-border, cross
currency transactions. Its segments are consumer-to-consumer and
global business payments. Its other businesses not included in
these segments primarily consist of Western Union money order and
prepaid services available through a network of third-party
agents.
Western Union (
WU
)
has a market capitalization of $7.15 billion. The company employs
8,000 people, generates revenue of $5.49 billion and has a net
income of $1.17 billion. The firm's earnings before interest,
taxes, depreciation and amortization (EBITDA) amounts to $1.58
billion. The EBITDA margin is 28.73 percent (the operating margin
is 25.22 percent and the net profit margin 21.22 percent).
Financial Analysis:
The total debt represents 39.51 percent of the company's assets and
the total debt in relation to the equity amounts to 400.45 percent.
Due to the financial situation, a return on equity of 157.75
percent was realized. Twelve trailing months earnings per share
reached a value of $2.01. Last fiscal year, the company paid $0.31
in the form of dividends to shareholders.
Market Valuation:
Here are the price ratios of the company: The P/E ratio is 5.93,
the P/S ratio is 1.31 and the P/B ratio is finally 8.27. The
dividend yield amounts to 4.18 percent and the beta ratio has a
value of 1.44.
These are the main competitors in detail:
Visa
(
V
) has a market capitalization of $116.30 billion. The company
generates revenue of $10.42 billion and has a net income of $2.14
billion. The firm's EBITDA amounts to $2.47 billion. The EBITDA
margin is 23.72% (operating margin 20.53% and net profit margin
20.55%).
The company has no long-term debt. Last fiscal year, a return on
equity of 7.93% was realized. Twelve trailing months earnings per
share reached a value of $1.87. Last fiscal year, the company paid
$0.99 in form of dividends to shareholders.
Here are the price ratios of the company: The P/E ratio is
76.85, Price/Sales 11.16 and Price/Book ratio 4.21. Dividend Yield:
0.92%. The beta ratio is 0.77.
American Express
(
AXP
) has a market capitalization of $63.63 billion. The company
generates revenue of $32.28 billion and has a net income of $4.90
billion. The firm's EBITDA amounts to $10.19 billion. The EBITDA
margin is 31.58% (operating margin21.55% and net profit margin
15.18%).
The total debt represents 43.10% of the company's assets and the
total debt in relation to the equity amounts to 351.63%. Last
fiscal year, a return on equity of 27.64% was realized. Twelve
trailing months earnings per share reached a value of $4.32. Last
fiscal year, the company paid $0.72 in form of dividends to
shareholders.
Here are the price ratios of the company: The P/E ratio is
13.13, Price/Sales 1.97 and Price/Book ratio 3.51. Dividend Yield:
1.41%. The beta ratio is 1.82.
eBay
(
EBAY
) has a market capitalization of $63.00 billion. The company
generates revenue of $11.65 billion and has a net income of $3.23
billion. The firm's EBITDA amounts to $3.39 billion. The EBITDA
margin is 29.12% (operating margin 21.05% and net profit margin
27.72%).
The total debt represents 7.65% of the company's assets and the
total debt in relation to the equity amounts to 11.65%. Last fiscal
year, a return on equity of 19.44% was realized. Twelve trailing
months earnings per share reached a value of $2.93. Last fiscal
year, the company paid $0.00 in form of dividends to
shareholders.
Here are the price ratios of the company: The P/E ratio is
16.61, Price/Sales 5.41 and Price/Book ratio 3.49. Dividend Yield:
None%. The beta ratio is 1.47.
Mastercard
(
MA
) has a market capitalization of $58.45 billion. The company
generates revenue of $6.71 billion and has a net income of $1.90
billion. The firm's EBITDA amounts to $2.91 billion. The EBITDA
margin is 43.30% (operating margin 40.41% and net profit margin
28.36%).
The company has no long-term debt. Last fiscal year, a return on
equity of 34.43% was realized. Twelve trailing months earnings per
share reached a value of $17.26. Last fiscal year, the company paid
$0.60 in form of dividends to shareholders.
Here are the price ratios of the company: The P/E ratio is
27.20, Price/Sales 8.34 and Price/Book ratio 10.15. Dividend Yield:
0.26%. The beta ratio is 0.90.
Fiserv
(FISV) has a market capitalization of $10.21 billion. The company
generates revenue of $4.34 billion and has a net income of $473.00
million. The firm's EBITDA amounts to $1.25 billion. The EBITDA
margin is 28.84% (operating margin 21.01% and net profit margin
10.91%).
The total debt represents 39.72% of the company's assets and the
total debt in relation to the equity amounts to 104.20%. Last
fiscal year, a return on equity of 15.14% was realized. Twelve
trailing months earnings per share reached a value of $4.24. Last
fiscal year, the company paid $0.00 in form of dividends to
shareholders.
Here are the price ratios of the company: The P/E ratio is
17.73, Price/Sales 2.32 and Price/Book ratio 3.24. Dividend Yield:
None%. The beta ratio is 1.03.
Global Payments
(GPN) has a market capitalization of $3.41 billion. The company
generates revenue of $2.20 billion and has a net income of $217.57
million. The firm's EBITDA amounts to $406.45 million. The EBITDA
margin is 18.44% (operating margin 13.95% and net profit margin
9.87%).
The total debt represents 19.66% of the company's assets and the
total debt in relation to the equity amounts to 45.08%. Last fiscal
year, a return on equity of 15.97% was realized. Twelve trailing
months earnings per share reached a value of $2.16. Last fiscal
year, the company paid $0.08 in form of dividends to
shareholders.
Here are the price ratios of the company: The P/E ratio is
20.01, Price/Sales 1.55 and Price/Book ratio 2.90. Dividend Yield:
0.18%. The beta ratio is 0.85.
The full Dividend Idea (Western Union) as
PDF-report
is linked.
--
* I am long in WU shares. I receive no compensation to write
about these specific stocks, sector or theme. I don't plan to
increase or decrease positions or obligations within the next 72
hours.
For the other stocks: I have no positions in any other stocks
mentioned, and no plans to initiate any positions within the next
72 hours. I receive no compensation to write about any specific
stock, sector or theme.
The stock analysis, including the rating and up/down potential,
is based on historical information and provided by several data
provider like Thompson Reuters, Morningstar, GoogleFinance,
YahooFinance and MSN. The analysis assumes the stock will perform
in the future as it has in the past. This is generally never true.
Material presented here is for informational purposes only. Before
buying or selling a security, you should do your own research and
reach your own conclusion.