The Western Union Company (NYSE:WU), a global leader in payment and money transfer services, has been making waves recently with its growth in the market. With total shares valued at over $4 billion and its stocks trading at $10.89 as of Thursday, it is no wonder that companies like DekaBank Deutsche Girozentrale are taking notice.
In fact, during Q4 2020, DekaBank Deutsche Girozentrale increased its position in WU shares by an impressive 32.6%. As per their most recent filing with the Securities and Exchange Commission (SEC), DekaBank Deutsche Girozentrale now owns 251,082 shares of WU after acquiring an additional 61,773 shares during that period. This gives them control of approximately 0.07% of WU’s total worth, which stands at a staggering $3,462,000 according to the same filing.
The WU entity operates primarily through three segments – Consumer-to-Consumer, Business Solutions and Other – each catering to specific financial needs within the market. The Consumer-to-Consumer segment provides customers with hassle-free solutions for transferring funds between themselves whilst the Business Solutions segment focuses on providing formidable payment and foreign exchange resolutions to small businesses across different geographical borders.
Despite these promising numbers however, analysts remain cautious about WU’s prospects going forward given the current volatile nature of the finance industry due to the Covid-19 pandemic. WU’s beta standing at 0.85 points towards this reality.
Furthermore, though they have successfully maintained a steady stock trading price so far this year compared to last year’s low point of $10.07 — peaking at last year’s high value of $19.97 — there is still some level of discomfort amongst investors due to unresolved debt-equity levels as shown by their KPIs such as debt-equity ratio which stands at an eyebrow-raising figure of 5.48.
In conclusion, WU and DekaBank Deutsche Girozentrale’s recent foray into the financial market has been met with mixed reactions from investors due to several impending uncertainties surrounding the organisation’s KPIs. However, their unique business structure and service offerings suggest an opportunity for investment in the company provided a well-calculated risk evaluation is done by potential investors.
Institutional Investors Increase Holdings in Western Union Despite Mixed Analyst Reports
Western Union, the credit service provider, has experienced a surge in holdings with various institutional investors and hedge funds. AIA Group Ltd grew its stake in shares of Western Union by 79.2% during Q4, now owning 24,105 shares of the company’s stock. AE Wealth Management LLC also lifted its shares by 33.3%, owning 903,224 shares valued at $12,437,000 after purchasing an additional 225,753 during the last quarter. Moreover, Geneos Wealth Management Inc grew its stake by 83.8% during Q4 to hold10,520 shares worth $145,000 which led New York State Common Retirement Fund to increase their holdings by 1.4%, trading in for an additional 6,673 shares worth $6,627,000.
Some institutions were optimistic despite mixed results from research analysts such as Barclays who lowered their price objectives on Western Union from $13 to $10 and have it rated underweight while UBS Group upgraded on Monday April 10th from a ‘sell’ to a ‘neutral’ rating. With six sell ratings recorded alongside nine holds the overall consensus target is presently listed at $13.9 according to data provided by Bloomberg.
The Western Union Co has expanded into money transfer and payment services via three segments; Consumer-to-Consumer (‘C2C’), Business Solutions (‘BS’) and ‘Other.’ The C2C segment facilitates financial transfers between two consumers while BS offers payment solutions which make way for foreign exchanges through cross-border or cross-currency transactions designed for medium-sized businesses and corporations paying overseas contracts or dealing with offshore operations.
EPS reports show revenue decrease during Q1 of this year against analyst expectations coming in on a negative note; Credit service provider Western Union reported a revenue decline of 15% YoY; its Q1 earnings missed estimates with EPS of $.32 versus expected values of $.35. Nonetheless, the company did announce a quarterly dividend paid on Friday, March 31st with a total annualized yield of $0.94 and an impressive 8.63% dividend yield based on holdings.
