Why Western Union Still Deserves a Place in Your Portfolio

The Western Union Company WU is poised for growth, leveraging declining expense levels, strong performance of the Consumer Services and the Branded Digital businesses and investments to enhance digital capabilities. Rising operational margins and strong dividend yield also present a compelling investment opportunity.

Headquartered in Denver, CO, WU is a leader in global money transfer. It currently has a market cap of $2.9 billion. Due to solid prospects, this currently Zacks Rank #2 (Buy) stock is worth investing in at the moment.

Let’s delve deeper.

The Zacks Consensus Estimate for Western Union’s current-year earnings is pegged at $1.73 per share, which has witnessed two upward estimate revisions in the past 60 days against none in the opposite direction. The estimate for 2026 indicates a further 3% year-over-year increase. WU beat on earnings in two of the last four quarters and missed twice, the average surprise being 0.6%. Over the past year, its shares fell 12.5%, below 8.4% decline of the industry.

The Western Union Company Price, Consensus and EPS Surprise

The Western Union Company price-consensus-eps-surprise-chart | The Western Union Company Quote

The price fall has created an opening for investors. Its forward 12-month price-to-earnings ratio of 5.24X is lower than its five-year median of 7.54X and the industry average of 21.16X, indicating that the stock is more affordable. It currently carries a Value Score of A.

The consensus estimate for Western Union’s 2025 and 2026 revenues stands at nearly $4.09 billion and $4.11 billion, respectively. We expect its growing presence in high-growth remittance corridors, like Latin America, will support performance. The acquisition of International Money Express, Inc. IMXI for $500 million can be a major growth driver. Intermex has built a strong network and brand in markets with large migrant populations and increasing digital adoption, making it a strategic fit for WU’s expansion plans. The transaction is expected to close by mid-2026.

Furthermore, we expect its operational margins to benefit from cost-reducing efforts like the Global Strategy. These moves have helped the company to lower total expenses by 9% in 2022, 1.4% in 2023, 1.6% in 2024 and 5% in the first nine months of 2025. Adjusted operating margin is expected to be between 19% and 21% for 2025.

Its attractive dividend yield can also garner investor interest. The metric currently stands at 10.05%, much higher than the industry average of 0.68%. WU returned $496 million to shareholders in 2024, including $318 million in dividends and $177 million in share repurchases. In the first nine months of 2025, it distributed $430 million through dividends ($230 million) and buybacks ($200 million). As of Sept. 30, 2025, $800.3 million remained authorized for further share repurchases.

Risks

However, there are a few factors that investors should keep an eye on.

WU’s levered balance sheet is concerning. Its total debt-to-total capital of 73.7% at the third-quarter end is significantly higher than the industry’s figure of 45.1%. Also, its return on invested capital (ROIC) of 9.46% is much lower than the industry average of 22.91%. Nevertheless, its disciplined and strategic execution should support sustained growth and steadily improve profitability over the long term.

Other Key Picks

Investors interested in the broader Business Services space can look at some other top-ranked stocks like Klarna Group plc KLAR and Green Dot Corporation GDOT, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Klarna’s current year earnings is currently pegged at a loss of 57 cents per share, followed by a 188.5% improvement next year. It has witnessed three upward estimate revisions in the past 60 days, against no downward movement. The consensus mark for Klarna’s revenues for the current year is pegged at $3.5 billion, and then a 29.9% increase next year.

The Zacks Consensus Estimate for Green Dot’s current-year earnings of $1.39 per share suggests 1.5% year-over-year growth. It beat earnings estimates in each of the past four quarters, with an average surprise of 86.6%. The consensus estimate for Green Dot’s current year revenues is pegged at $2.06 billion, indicating a 20.4% increase from a year ago.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research