Western Union (WU) Poised for Growth Amid Stiff Competition

On Aug 18, we issued an updated research report on Western Union Co. WU.  The company reported second-quarter 2015 operating earnings per share of $0.41 per share that beat the Zacks Consensus Estimate by 5.1%. Earnings were also up 13.9% year over year.

The Western Union Company is a leader in global money transfer, with an over 500,000-location wide agent network across 200 countries and over 100,000 ATMs that offer its money transfer services.

The company's biggest revenue provider – the Consumer-to-Consumer segment – has been consistently growing over the years. With remittance expected to grow worldwide, the segment too is slated for long-term growth.

While the majority of the company's money transfer service was provided by physical agent location, the company is gearing up to adapt itself to the electronic form of transferring money, which is so common today. The company has made massive investments in its electronic platform which will help it to face growing competition from other strong electronic payment transfer companies such as Xoom Corp. XOOM.

Moreover, cost-saving initiatives are also driving bottom-line growth. Western Union's significant international operations also provide diversification benefits.

Nevertheless, compliance cost, weakness in certain markets such as Russia and Africa, foreign exchange volatility and stiff competition pose as concerns.

Western Union carries a Zacks Rank #2 (Buy). Some other players worth considering are Equifax Inc. EFX and Global Payments Inc. GPN. Both these stocks carry the same Zacks Rank as Western Union.

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WESTERN UNION WU: Free Stock Analysis Report
 
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