Western Union Stock: 11%-Yielder Selling for Valuations Too Low to Ignore
July 22, 2025
WU Stock: Priced Like a Dying Business Throwing Off Big Dividends
Over the past decade, the financial world has been turned upside down. Cryptocurrencies were introduced with the promise to disrupt how we send and store money. Fintech startups popped up everywhere, offering easy-to-use apps and instant money transfers.
With this, the traditional players were deemed slow, expensive, and built for a different time period. We’re told that eventually they will fade away.
But sometimes, the story doesn’t play out the way everyone expects.
Western Union Co (NYSE:WU), a name that makes many people think of outdated ways involving money transfers and physical retail locations, is proving that it’s not ready to be replaced just yet. Behind the scenes, the company has been undergoing a major transformation: cutting costs, streamlining operations, and aggressively expanding its digital footprint.
Investors remain skeptical, but with close to an 11% dividend yield, rock-bottom valuations, and stable financials, Western Union stock is looking like a deep value income play. Patient shareholders could be rewarded immensely here.
What Does Western Union Do?
Headquartered in Denver, Colorado, Western Union Co offers money movement and payment services globally. The company operates through two business segments: Consumer Money Transfer and Consumer Services.
The Consumer Money Transfer segment provides international cross-border and intra-country money transfer services, primarily through a network of retail agent locations, websites, and mobile devices.
The Consumer Services segments offers services such as bill payments, money orders, retail foreign exchange, prepaid cards, lending partnerships, digital wallets, and a media network. (Source: “Profile,” Yahoo! Finance, last accessed July 10, 2025.)
A Robust 11% Dividend Yield
One of the most attractive features of Western Union stock is its dividend.
Despite all the noise about disruption and competition, Western Union has continued to return cash to shareholders quarter after quarter, like clockwork. The dividend isn’t just generous; it has been consistent, even with the company having to steer through a quickly changing business environment.
Currently, Western Union stock pays $0.235 per share each quarter. On an annual basis, this amounts to $0.94 per share. This equates to a dividend yield of 10.8% at the current price.
Now, anytime a company’s dividend yield surpasses 10%, it’s important that investors ask whether the yield is safe. Sometimes there are dividend traps out there; this is when a stock’s dividend yield looks great, but the company’s fundamentals are tormented.
At the moment, given Western Union’s current financials and what’s ahead, its dividends seem safe.
For some perspective: Wall Street analysts are projecting that the company will report earnings per share of $1.78 in 2025 and $1.85 in 2026. (Source: “Analysis,” Yahoo! Finance, last accessed July 10, 2025.)
The current dividend is roughly around 52.8% of Western Union’s 2025 earnings and 50.8% of its 2026 earnings. It may sound like an out-of-this-world idea at the moment, but since these payout ratios are so low, the company even has room to grow its dividends and still have some money left to reinvest.
Chart Courtesy of StockCharts.com
Western Union Stock’s Valuations Remain Low
WU stock is trading at levels you don’t often see a stable company trading for in today’s market.
Western Union stock is currently trading at 4.86 times its forward earnings. That’s really cheap. Some of the bloated fintech and financial stocks get much higher valuations.
Even relative to the broader market, say the S&P 500, Western Union stock is severely undervalued. As it stands, the S&P 500 is trading at 22.2 times the forward earnings. (Source: “Earnings Insights,” FactSet, July 2, 2025.)
Don’t forget; this is a company that’s still making money. Right now, the market is pricing WU like it’s a dying business. But that’s far from the case. However, if Western Union manages to stabilize and keep growing its digital footprint, that narrative could flip—and when it does, the stock could re-rate in a big way.
The Lowdown on Western Union Stock
Western Union is one of the oldest names in the money transfer business. The company operates in over 200 countries and moves billions of dollars across borders. Certainly, in recent years, it has struggled with declining revenue, and fierce competition from fintech and crypto companies.
However, it can’t be stressed enough: Western Union stock is down, but not out. As mentioned, the company is actively cutting costs and streamlining operations.
On the financial front, Western Union remains profitable and continues to generate solid free cash flow. Its balance sheet isn’t perfect, but it’s far from distressed.
The best part for income investors: the stock trades at rock-bottom valuation multiples and pays a dividend that yields close to 11%. This sort of opportunity is hard to find in this market where the S&P 500 has a dividend yield of a little above 1.2%.
Investors should also know that there’s a lot of institutional support for Western Union stock as well. As per the most recent data, 619 institutional investors hold 99.43% of all outstanding shares. BlackRock Inc, The Vanguard Group Inc, and T. Rowe Price Associates, Inc. are the biggest shareholders. Combined, these three shareholders own close to 101 million shares of WU stock. (Source: “Holders,” Yahoo! Finance, last accessed July 10, 2025.)
