The Western Union Co

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WU : NYSE : Financial
$18.84 -0.04 | -0.21%
Today's Range: 18.77 - 18.98
Avg. Daily Volume: 4130500.0
06/28/17 - 10:24 AM ET

Financial Analysis


WESTERN UNION CO's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased.

At the same time, stockholders' equity ("net worth") has significantly decreased by 39.44% from the same quarter last year.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1302.41297.7
EBITDA ($mil)320.2324.2
EBIT ($mil)253.8258.6
Net Income ($mil)161.7185.7


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1323.31160.0
Total Assets ($mil)9486.09418.3
Total Debt ($mil)3490.93225.7
Equity ($mil)750.31239.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin43.9644.99
EBITDA Margin24.5824.98
Operating Margin19.4919.93
Sales Turnover0.570.58
Return on Assets2.418.7
Return on Equity30.5466.15
Debt Q1 FY17 Q1 FY16
Current Ratio0.00.0
Debt/Capital0.820.72
Interest Expense31.340.5
Interest Coverage8.116.39


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)472.0491.7
Div / share0.180.16
EPS0.330.37
Book value / share1.592.52
Institutional Own % n/a n/a
Avg Daily Volume4113344.05980240.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 31.75 for the IT Services industry and a significant premium compared to the S&P 500 average of 25.75. For additional comparison, its price-to-book ratio of 11.81 indicates a significant premium versus the S&P 500 average of 3.09 and a significant premium versus the industry average of 9.85. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. After reviewing these and other key valuation criteria, WESTERN UNION CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WU 40.83 Peers 31.75   WU 9.81 Peers 21.57

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

WU is trading at a significant premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WU is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WU 10.49 Peers 22.07   WU 0.18 Peers 1.73

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WU is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WU trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WU 11.81 Peers 9.85   WU -71.25 Peers -1.13

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WU is trading at a premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WU is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WU 1.63 Peers 5.67   WU -0.61 Peers 11.40

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WU is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WU significantly trails its peers on the basis of sales growth

 

 

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