Western Union: A Household Name On The Verge Of An Upgrade
Things aren’t always black and white.
You can look at a stock with a low dividend safety rating and see that things may not be quite as dire as they appear.
That’s the case with Western Union (NYSE: WU).
The money transfer service pays an attractive 3.7% yield, but SafetyNet Pro suggests that the dividend is not particularly safe.
The company’s free cash flow (FCF) has been eroding, dropping from $1.1 billion in 2013 to an expected $913 million this year…
The above chart does not look promising. As a result, SafetyNet Pro penalizes the company for declining cash flow.
But if you look carefully, the estimate for 2017’s FCF is less than 1% lower than 2016’s. If Western Union is able to get that year-end cash flow number to $920 million (higher than last year’s total), it will receive an upgrade (if nothing else changes).
Western Union could also receive an upgrade if it raises its dividend next year. The company has boosted the dividend every year for nine years, since it started paying one. SafetyNet Pro gives points to companies that have track records of annual dividend raises for 10 years or longer.
SafetyNet Pro is a groundbreaking tool that predicts dividend cuts and raises with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet ...
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