KBC Group NV Reduces Stake in Western Union Despite Strong Quarterly Earnings
August 8, 2023
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Despite the company’s strong quarterly earnings, KBC Group NV recently announced that it has sold off a portion of its holdings in Western Union ($NYSE:WU). KBC Group NV is one of the largest shareholders of Western Union, and the sale of stock was reported in their 13F filing with the SEC on August 4, 2023. The extent of the sale and the financial details remain confidential. It is likely that KBC Group NV decided to reduce its holdings due to Western Union’s current market conditions. Despite its strong quarterly performance, the value of Western Union’s stock has been volatile in recent months due to the global economic uncertainty.
It remains to be seen how KBC Group NV’s decision to reduce its holdings in Western Union will affect the company’s future performance. Western Union will need to continue to demonstrate strong quarterly earnings and remain competitive in order to maintain its current market value. Despite the recent sale, KBC Group NV is still one of the company’s largest shareholders, and the reduced stake may still leave them with considerable returns depending on Western Union’s performance going forward.
Earnings
The financial services giant Western Union recently reported their Q2 earnings ending June 30 2021, and the results are strong. Total revenue was reported to be 1289.7M USD, showing a 13.3% increase compared to the same period last year. Net income also increased by 14.7%, reaching 222.5M USD.
This marks a steady increase from 1170.0M USD revenue 3 years ago. It is unclear what the underlying reasons of this strategic decision are, however, it is clear that Western Union continues to be a major player in the financial services industry with strong quarterly earnings.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Western Union. More…
| Total Revenues | Net Income | Net Margin |
| 4.39k | 751.3 | 15.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Western Union. More…
| Operations | Investing | Financing |
| 538.8 | 168.1 | -998.8 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Western Union. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 8.49k | 7.86k | 1.67 |
Key Ratios Snapshot
Some of the financial key ratios for Western Union are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -3.7% | -1.9% | 20.8% |
| FCF Margin | ROE | ROA |
| 7.4% | 96.6% | 6.7% |
Market Price
Analysis
At GoodWhale, we have analyzed WESTERN UNION‘s fundamentals and concluded that the company is strong in terms of dividend and profitability, but weak in asset and growth. We have classified WESTERN UNION as a ‘cow’, meaning a company with a track record of paying out consistent and sustainable dividends. This may be attractive to investors looking for reliable returns from companies with low-risk investment profiles. What’s more, WESTERN UNION has a high health score of 8/10 in terms of its cashflows and debt, demonstrating its ability to weather any crisis without the risk of bankruptcy. More…
Peers
It has a wide network of agents and locations around the world. Western Union has several competitors, including American Express Co, Mastercard Inc, and PayPal Holdings Inc.
– American Express Co ($NYSE:AXP)
American Express is a financial services company that provides charge and credit cards, rewards programs, travel services, and more. The company has a market cap of 106.78B as of 2022. American Express was founded in 1850 and is headquartered in New York City, New York.
– Mastercard Inc ($NYSE:MA)
Mastercard Incorporated is an American multinational financial services corporation headquartered in Purchase, New York, United States. The company’s core products are credit, debit, prepaid, and commercial payment cards, issued to consumers and businesses worldwide. Mastercard also processed approximately $3.4 trillion in payments in 2019.
The company has a market cap of $286.32B as of 2022 and a Return on Equity of 110.3%. Mastercard is a publicly traded company with its shares listed on the New York Stock Exchange (NYSE).
– PayPal Holdings Inc ($NASDAQ:PYPL)
PayPal Holdings Inc is a US-based company that operates a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. The company has a market cap of 98.05B as of 2022 and a Return on Equity of 11.16%. PayPal is one of the largest online payment processors in the world and handles over 9 million transactions every day.
Summary
KBC Group NV has recently reduced their position in Western Union (WU) following the latter’s strong quarterly earnings. WU is a global leader in cross-border, cross-currency money movement and is seeing an increase in demand for its services as people around the world look for secure and reliable methods to send and receive money. With new digital capabilities in both consumer-to-consumer and business-to-business payments, WU has positioned itself as a competitive player in the global payments market.
As such, investors should consider the potential upside to investing in WU, given the company’s strong financials and high level of customer service. The company’s strategic partnerships and industry-leading technologies should also be taken into account when looking at WU as an investment opportunity.
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