The Western Union Company (NYSE:WU)

CAPS Rating: 4 out of 5

The Company deals in money transfer, providing people with fast, reliable and convenient ways to send money around the world, pay bills and purchase money orders.


Player Avatar yieldideas (< 20) Submitted: 11/5/2012 10:40:59 PM : Outperform Start Price: $11.76 WU Score: +9.82

Western Union is a cash flow machine and in addition to the recent lower guidance which took center stage, management announced another share repurchase program to total $750M or 10% of market cap. Since 2006 it has bought back $4.6 Billion of its own shares. Operating margins have gone down from 31% in 2004 to 25% in 2012, which is still a lot higher than the 11% margin for MoneyGram (MGI). The money transfer business is just not going away and if WU as the largest player is facing additional costs, imagine the hardship the smaller competitors are dealing with and how their costs are affected.

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