NEW YORK ( TheStreet) -- Western Union Company (NYSE: WU) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- Net operating cash flow has increased to $237.30 million or 10.37% when compared to the same quarter last year. Despite an increase in cash flow of 10.37%, WESTERN UNION CO is still growing at a significantly lower rate than the industry average of 73.31%.
- 47.50% is the gross profit margin for WESTERN UNION CO which we consider to be strong. Regardless of WU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WU's net profit margin of 15.99% is significantly lower than the industry average.
- WU, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- In its most recent trading session, WU has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the IT Services industry and the overall market, WESTERN UNION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
--Written by a member of TheStreet Ratings Staff.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.