In a bid to boost shareholder value, The Western Union Company’s WU board of directors unveiled a buyback program of $1 billion. The program comes without a predetermined expiration date and may be paused, adjusted or terminated at any time without prior notice.

Currently, WU has a $1-billion share repurchase program in place that was approved in February 2022 and is set to run through Dec. 31, 2024. During the nine months ended Sept. 30, 2024, the company bought back shares worth $177.3 million as part of this repurchase authorization, with a leftover balance of $170.9 million as of the third-quarter end. 

Concurrent with the new buyback program, management announced a quarterly cash dividend of 23.5 cents per share. The dividend will be paid out on Dec. 31, 2024, to shareholders of record as of Dec. 23, 2024.

Impressive Capital Deployment History of WU

Western Union boasts a commendable track record of returning value to shareholders through share repurchases and dividend payments. It has been a regular dividend-paying company for nearly two decades now. WU’s dividend yield of 8.7% is significantly higher than the industry average of 0.7%. 

During 2021, 2022 and 2023, Western Union repurchased common shares worth $400 million, $351.8 million and $300 million, respectively, It also paid out dividends of $380.5 million, $361.6 million and $346.1 million, respectively, in the same time frame.  

A strong financial position equips a company to pursue uninterrupted share buybacks and dividend payments. The same has been the case with Western Union, which is backed by a sound cash balance and adequate cash generation abilities. It had cash reserves of around $1.1 billion as of Sept. 30, 2024. 

Western Union’s Price Performance & Zacks Rank

Shares of Western Union have lost 9.4% in the past three months against the industry’s 10.8% growth. WU currently carries a Zacks Rank #3 (Hold).

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Stocks to Consider

Some better-ranked stocks in the Business Services space are Parsons Corporation PSN, Huron Consulting Group Inc. HURN and Duolingo, Inc. DUOL. Parsons sports a Zacks Rank #1 (Strong Buy), and Huron Consulting and Duolingo carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Parsons outpaced estimates in each of the last four quarters, the average surprise being 17.49%. The Zacks Consensus Estimate for PSN’s 2024 earnings indicates an improvement of 40.7% from the year-ago figure. The estimate for revenues implies growth of 24.2% from the year-ago actual. The consensus mark for PSN’s 2024 earnings has moved 6.9% north in the past 60 days. 

Huron Consulting’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 19.09%. The Zacks Consensus Estimate for HURN’s 2024 earnings indicates an improvement of 24.2% from the year-ago figure. The estimate for revenues implies growth of 8.6% from the year-ago actual. The consensus mark for HURN’s 2024 earnings has moved 2.5% north in the past 60 days.

The bottom line of Duolingo outpaced estimates in each of the last four quarters, the average surprise being 51.12%. The Zacks Consensus Estimate for DUOL’s 2024 earnings is pegged at $2.02 per share, which indicates a nearly six-fold increase from the year-ago figure. The estimate for revenues implies growth of 39.9% from the year-ago actual. The consensus mark for DUOL’s 2024 earnings has moved 8% north in the past 60 days.

Shares of Parsons, Huron Consulting and Duolingo have gained 0.7%, 13.3% and 42.2%, respectively, in the past three months.

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The Western Union Company (WU) : Free Stock Analysis Report

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