Western Union CO (WU) stock analysis

P/E above its 5-year median

Western Union's P/E of 6.4 is above its own 5-year median of 6.0.

P/E below the industry

Western Union's P/E of 6.4 is below the Miscellaneous Business Services median of 25.8.

EV/EBITDA below its 5-year median

Western Union's EV/EBITDA of 1.8 is below its 5-year median of 3.7.

P/S below the industry

Western Union's price-to-sales of 0.52 is below the Miscellaneous Business Services median of 1.67 (book value is negative, so we use sales).

Trading below fair value

The share price of $6.73 is below our fair value estimate of $19.26.

Margin of safety over 20%

The price is 65.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -3.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -13.4% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -56.7% over the last twelve months, against a 5-year average of -7.7% a year.

Growing slower than the industry

Revenue grew -2.1% over the last twelve months; the Miscellaneous Business Services median is 9.9%.

Guidance unchanged

The latest outlook (2026 adjusted effective tax rate, Jul 30, 2026) was maintained, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 34.1% over the last twelve months, against 37.4% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings shrank over 5 years

Net income shrank 7.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 8.3% over the last twelve months, against a 5-year average of 17.0%.

Net margin above the industry

Western Union's net margin of 8.3% is above the Miscellaneous Business Services median of 3.8%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt coverage

Needs operating cash flow.

Interest not well covered

Operating income covers interest expense 3.8 times; we look for at least 5.

Short-term liquidity

The balance sheet is not split into current and non-current items.

Elevated bankruptcy risk

The Altman Z-score is 0.89; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Western Union paid dividends worth 14.0% of the share price over the last twelve months.

Yield above Treasuries

The 14.0% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Western Union yields 14.0%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Not covered by earnings

Dividends take 90.1% of net income, leaving little room.

Covered by free cash flow

Dividends take 72.9% of free cash flow.