At the end of October, Western Union announced its quarterly earnings for Q3 at $0.49 per share. While it was a pleasant surprise, it was their restructuring program that caught everyone’s attention.
On the company’s Investor Day, Western Union reiterated a firm commitment to paying investors through dividends, while also pledging to keep innovating by reinforcing cross-border offerings, making investments in newer technology, and committing to long-term growth. The announcement echoed the company’s dedication to rewarding shareholders while keeping a strong financial foundation, giving investors more reason to be excited.
In 2018, the company reported revenue of $5.6 billion and gave over $740 million back to investors via dividends and share repurchases. This year, they’ve allotted around $900 million for dividends and share repurchases. The company plans to continue this, forecasting that it will return approximately $2.5 to $3 billion to shareholders over the next three years.
For those who look to external rating services like RapidRatings, they can be assured that Western Union is in good stead. RapidRatings, which ranks entities according to their financial health and overall viability, assigns each company a “health rating.” Western Union boasts an impressive score of 81 out of 100 due to its low default for short term risk. This sets the company ahead of the overall business products and services sector, which has a financial health rating of 58.1.
However, Western Union's ability to facilitate global peer-to-peer payments in over 200 countries is unmatched. On Investor Day, the company revealed its intent to expand into untapped markets as well as how it plans to partner with other companies and customers.
“Other companies don’t have the ability to deal with all the complexity that comes into cross-border money movement. What we can offer them is access to the world overnight, and that is a pretty huge value proposition,” says Western Union CFO Raj Agrawal. “We say we can offer them access to all channels – including cash, digital, mobile – in 200 countries worldwide. Or they can try to build all of that on their own.”
Most recently, the company has partnered with Amazon in a new project called, Amazon PayCode. In an attempt to reach customers who prefer to use cash, PayCode will allow people to shop online and pay offline. And it won’t cost customers any extra money, with Amazon paying Western Union a facilitation fee.
While Western Union develops and evolves to fit the ever-growing market, it seems there is no better time to be a shareholder.