The Western Union Company (WU): A Bull Case Theory

We came across a bullish thesis on The Western Union Company (WU) on r/ValueInvesting Subreddit by GABAAPAM. In this article, we will summarize the bulls’ thesis on WU. The Western Union Company (WU)'s share was trading at $8.12 as of 15^th July. WU’s trailing and forward P/E were 3.02 and 4.56 respectively according to Yahoo Finance.

The Western Union Company (WU) is widely viewed as a legacy business in terminal decline, but a deeper look reveals a compelling contrarian opportunity. Trading at just $8.12 per share with a market cap of $2.7 billion, WU is priced like a company headed for bankruptcy. Revenue has declined from $5 billion in 2021 to $4.2 billion in 2024, reinforcing the “melting ice cube” narrative.

Yet, WU's shareholder return profile tells a different story. With an 11.6% dividend yield and a forward payout ratio of just 52% based on midpoint 2025 EPS guidance of $1.80, the dividend appears sustainable. The company has also reduced its share count by nearly 20% since 2019 through consistent buybacks, supporting earnings per share despite revenue pressure. Altogether, shareholder yield stands comfortably in the mid-teens. Debt, while present at $2.9 billion, is offset by $1.5 billion in cash and $930 million in 2024 net income, making leverage a manageable 1.5x net income.

At a forward P/E of 4.5x and stable 19–21% operating margins, the valuation appears disconnected from fundamentals. Critics cite fintech disruption and the decline of its consumer-to-consumer (CMT) segment, but this ignores growing digital revenue—up 27% YoY in Q1 2025—and the durability of WU's vast physical network.

For underserved, cash-based economies, this infrastructure remains vital. While not a growth story, WU is a cash-generating business with misunderstood resilience, a stable balance sheet, and a focus on returns, offering an attractive yield and significant upside if the market re-evaluates its assumptions.

Previously we covered a bullish thesis on The Western Union Company (WU) by Bulls On Parade in February 2025, which highlighted the company's undervaluation, strong dividend yield, and digital growth strategy under the EVOLVE 2025 plan. The company's stock price has depreciated approximately by 23% since our coverage.. This is because fundamentals remain intact, with digital traction and shareholder returns still strong. GABAAPAM shares a similar thesis but emphasizes the disconnect between WU’s valuation and its resilient cash flow profile.

The Western Union Company (WU) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held WU at the end of the first quarter which was 31 in the previous quarter. While we acknowledge the potential of WU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.