Western Union (NYSE:WU) [Trend Analysis] is a the brand so well known in the world when it comes to foreign exchange and money transfers. As such a go to brand for consumers when it comes to these services, does it make Western Union a go to stock for investors? We look at 3 reasons just why it might be,
1. Strong Dividend
Western Union (NYSE:WU) is paying investors an incredibly healthy dividend of around 3.2%. This is excellent income that investors can earn on top of possible growth in the share price for investors from a company with a market cap of around $10 billion.
2. Low Price to Earnings Multiple
Western Union is trading on a forward price to earnings (P/E) multiple of 11.37 based on analysts consensus earnings estimates for next year and a trailing P/E of 12.14. Compared to the current market average forward P/E of around 19, this makes Western Union look very cheap and potentially a strong buy for investors based on the current stock price.
3. Emerging Markets Exposure
Western Union (NYSE:WU) is present in most of the world’s emerging markets. With growth slower in developed markets, such exposure to developing markets provide much higher opportunities for Western Union to achieve higher growth.
4. Siginificant Market Opportunities
With electronic payments being so huge and new fancy technology available for this, Western Union has the brand name to capitalize and get involved in these opportunities and achieve significant growth in them. Whether WU gets involved heavily in this will be interesting and investors should keep a look out for news which suggests whether they do or not.
Western Union (NYSE:WU) based on the above 4 points looks like a solid stock, but for investors who believe in facts, the low multiple and high dividend itself certainly make WU look like decent opportunity in the current market.