Why WESTERN UNION CO (NYSE:WU) provides a good dividend, while having solid fundamentals.

Discover WESTERN UNION CO (NYSE:WU)—a stock that our stock screener has recognized as a solid dividend pick with strong fundamentals. WU showcases decent financial health and profitability while providing a sustainable dividend. We'll explore the specifics further.

Dividend Assessment of WU

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. WU scores a 8 out of 10:

• With a Yearly Dividend Yield of 8.92%, WU is a good candidate for dividend investing.
• Compared to an average industry Dividend Yield of 4.18, WU pays a better dividend. On top of this WU pays more dividend than 96.04% of the companies listed in the same industry.
• Compared to an average S&P500 Dividend Yield of 2.39, WU pays a better dividend.
• WU has been paying a dividend for at least 10 years, so it has a reliable track record.
• WU has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 34.41% of the earnings are spent on dividend by WU. This is a low number and sustainable payout ratio.

Unpacking WU's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. WU has received a 5 out of 10:

• WU has a better Altman-Z score (1.21) than 60.40% of its industry peers.
• A Current Ratio of 2.17 indicates that WU has no problem at all paying its short term obligations.
• WU has a Current ratio of 2.17. This is in the better half of the industry: WU outperforms 76.24% of its industry peers.
• A Quick Ratio of 2.17 indicates that WU has no problem at all paying its short term obligations.
• WU's Quick ratio of 2.17 is fine compared to the rest of the industry. WU outperforms 77.23% of its industry peers.

What does the Profitability looks like for WU

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For WU, the assigned 8 is a significant indicator of profitability:

• WU has a Return On Assets of 11.16%. This is amongst the best in the industry. WU outperforms 92.08% of its industry peers.
• WU has a Return On Equity of 96.42%. This is amongst the best in the industry. WU outperforms 99.01% of its industry peers.
• The Return On Invested Capital of WU (8.37%) is better than 80.20% of its industry peers.
• WU had an Average Return On Invested Capital over the past 3 years of 9.80%. This is above the industry average of 7.58%.
• WU's Profit Margin of 22.19% is fine compared to the rest of the industry. WU outperforms 76.24% of its industry peers.
• WU's Profit Margin has improved in the last couple of years.
• The Operating Margin of WU (18.22%) is better than 60.40% of its industry peers.
• WU's Operating Margin has improved in the last couple of years.

More Best Dividend stocks can be found in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of WU

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.