Western Union: Secular Issue And Competition Point To A Continued Decline

Kevin Anthony D. Arroyo504 FollowersFollow5ShareSavePlay(16min)CommentsSummarySimilar to the telegraph, Western Union's(WU) remittance business faces disruption from lower-cost digital fintechs, which have led to its deteriorating performance and evidence suggests a continuation of this trend.Along with intense competition, secular issues facing immigrants could exacerbate Western Union's deteriorating core remittance business.Western Union's Consumer Service is a promising ancillary segment for the company. However, it relies on the company's core remittance business to thrive.WU offers an attractive 15% total shareholder yield. However, given the significant headwinds the company faces, I believe a bit pricier stocks with fewer problems are a better choice. martinrlee/iStock Editorial via Getty Images Echoes Of The Past: Disruption of Western Union Founded in 1851, The Western Union Company(WU) enjoyed decades of prosperity from its monopoly status in telegraph until the rise of the telephone, led by theThis article was written byKevin Anthony D. Arroyo504 FollowersFollowMy investing approach is finding companies with leadership economics associated with their business models and selling at a reasonable price. My articles will primarily discuss a company's strategy to drive growth, competitive advantage that drives superior return on capital, capital structure, capital allocation, and management incentives. I consider myself a value investor looking for permanent ownership of strong companies with trustworthy management.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.