Western Union: 11% Yield Is A Buy Signal On Margin Strength

Ben Holden-Crowther414 FollowersFollow5ShareSavePlay(13min)CommentsSummaryWestern Union trades at a deep discount, with an ~11% dividend yield and an adjusted P/E of ~5x, despite robust core operations.Cost-saving initiatives in Q4 maintained the firm's 20% margins, offsetting a 5% revenue decline resulting from U.S. immigration policy.Growth in Europe and CIS revenue (+5.8% in Q4) and resilient Middle East flows for Q1 will mitigate U.S. immigration policy impacts.The biggest operational risk is cannibalizing the retail agent network as the firm transitions to its stablecoin-backed Digital Asset Network.I expect 1Q26 earnings to be somewhat lower than Q1 last year, in line with consensus estimates. John Pollock/iStock Editorial via Getty Images Investment Thesis Western Union (WU) is one of the stocks I've covered most frequently on Seeking Alpha in recent years, with its chronic undervaluation appearing somewhat detached from operational realities, in my view. A month and a half on fromThis article was written byBen Holden-Crowther414 FollowersFollowI am an international analyst with a Buffett and Munger inspired approach to investing. My emphasis is on identifying high quality, shareholder-oriented companies which have been unfairly discounted by the market due to short term factors or irrational investor psychology. At the moment, I am particularly interested in legacy businesses considered to be in secular decline in sectors such as remittances, ATMs and tobacco, where cash generative, high yield stocks (often with under-appreciated revenue and earnings growth) are very often unfairly ignored. While emphasizing U.S. stocks, I also cover attractive opportunities within my own country (the UK) and globally.Analyst’s Disclosure: I/we have a beneficial long position in the shares of WU, RELY either through stock ownership, options, or other derivatives. 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.