WU Stock: Nearly 10%-Yielding Legacy Business Selling for Pennies on the Dollar
June 3, 2025
Is Western Union Stock Worth a Closer Look?
A few years ago, if you listened to the tech crowd, you would think that Western Union Co (NYSE:WU) was as good as dead. We were told that blockchain and cryptocurrencies would wipe out WU stock. In fact, cryptocurrencies were expected to destroy all the legacy transfer services. Why wait days and pay fees when you could transfer money instantly with a cryptocurrency like Bitcoin?
That was the dominant story at the time. But here’s what actually happened: the mass adoption of cryptocurrencies stalled; volatility, regulation uncertainty, and usability issues prevailed.
In the meantime, Western Union adapted. It launched and expanded digital services, built mobile apps, and even explored partnerships with crypto players. It didn’t resist change—it evolved with the times.
Western Union is still used by millions of people around the world. Its infrastructure is still trusted and, most importantly, remains compliant with local regulations. Something with which the crypto world is still struggling.
Income investors should be pleased to know that WU stock keeps on delivering heavy dividends in the midst of all this. Even with bitcoin at record high prices, this money transfer company is worth a look.
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 May 23, 2025.)
WU Stock a Deal at Current Price?
In a market where many technology stocks are trading at 25x, 30x, or even 50x their earnings, WU stock appears to be selling for pennies on the dollar.
Get this: at the current price, WU stock trades at 5.35 times its forward earnings. Put simply, a shareholder is paying a little over $5.00 for every $1.00 of expected earnings. For some perspective, the S&P 500 is currently trading at 21.75 times the forward earnings.
Let’s compare that to some other competitors of Western Union: Visa Inc (NYSE:V) trades at 31.65x its forward earnings; and PayPal Holdings Inc (NASDAQ:PYPL) trades at 14.43x its forward earnings.
It is also important to note that Western Union isn’t a speculative penny stock. It has a long operating history, reliable cash flow, and a decent balance sheet.
But don’t just stop at earnings multiples. By any traditional metric, WU stock seems to be trading at valuations that suggest the company is under a lot of stress. However, this is far from the reality is far from it.
In fact, if even though Wall Street analysts are significantly pessimistic when they rate WU stock, they still believe that profitability at Western Union in 2025 and 2026 will improve. (Source: “Analysis,” Yahoo! Finance, last accessed May 23, 2025.)
So, WU stock isn’t under stress, it’s just misunderstood.
Chart Courtesy of StockCharts.com
Paying Shareholders to Be Patient
Western Union has been paying investors generously and consistently.
At the current price, WU stock has a dividend yield of 9.76%, paying $0.94 per share on an annual basis. You see, this is yield is not just high—it is actually very high for a company that has been profitable, is expected to make money, and is cash-flow positive.
Going forward, WU stock’s dividend is sustainable, too.
Consider this: for 2025, Western Union is expected to report earnings per share (EPS) of $1.78. Assuming it continues to pay $0.94 per share this year, this would mean a payout ratio of around about 53%.
For 2026, Western Union is expected to report EPS of $1.85. Assuming that the dividend on WU stock doesn’t change, this would mean payout ratio of close to 51%.
Translation: the payout ratio leaves decent “breathing room” for the company—room for reinvestment, share buybacks, or managing any potential headwinds without cutting dividends.
It is also worth noting that Western Union’s management is also very shareholder-friendly. Year after year, the management team has shown commitment to returning capital, not just through dividends but also through share buybacks.
The Lowdown on WU Stock
Western Union isn’t getting much attention these days, even when the company is expected to remain profitable and the stock trading at extremely low valuations relative to its peers. That is exactly what makes WU stock worth a closer look.
Cryptocurrencies were supposed to kill it. But here we are: Western Union is still standing, generating real profits and dishing out robust dividends to those who own WU stock.
Is this stock going to make headlines on Reddit? Probably not. But, for long-term income investors, it could be a great stock to own. It’s not broken; it’s just a misunderstood stock.
You should also know that institutional investors continue to hold onto WU stock. As per the most recent data, 629 institutions were holding close to close to 99% of all outstanding shares. BlackRock, Inc., The Vanguard Group, and T. Rowe Price, are the top three institutional investors; combined, they own close to 104 million WU shares.
