Core Viewpoint - The article presents a bullish perspective on Western Union (WU), highlighting its stable margins, new stablecoin initiative, and low valuation, complemented by a ~10% dividend yield [1]. Group 1: Company Analysis - Western Union is recognized for its stable margins and low valuation, making it an attractive investment opportunity [1]. - The company is initiating a stablecoin project, which is seen as a positive development for its future growth [1]. Group 2: Investment Strategy - The investment approach focuses on identifying high-quality, shareholder-oriented companies that are undervalued due to short-term market factors or irrational investor behavior [2]. - There is a particular interest in legacy businesses in sectors like remittances, ATMs, and tobacco, which are often overlooked despite their cash-generative capabilities and high dividend yields [2].

Market Overview - U.S. equity markets in Q4 2025 were influenced by optimism around potential monetary easing and caution regarding economic growth and valuations [1] - Strong AI-related earnings and a rate cut by the US Federal Reserve in October initially drove market gains, but sentiment cooled later due to mixed signals from the Fed [1] - Large-cap stocks rose 17.4% for the year and 2.4% in the quarter, while small caps gained 12.8% for the year and 2.2% in the quarter [1] - Value stocks outperformed growth stocks, returning 3.3% versus 1.2% for the quarter [1] Fund Performance - Meridian Growth Fund delivered a return of -0.39% (net) in Q4 2025, underperforming the Russell 2500 Growth Index's return of 0.33% [1] - The firm is monitoring factors affecting market returns, including potential changes in monetary policy and the sustainability of AI investments due to high valuations among hyperscalers [1] Company Focus: Remitly Global, Inc. - Remitly Global, Inc. (NASDAQ:RELY) was highlighted as a leading relative detractor for the Meridian Growth Fund in Q4 2025 [2] - The company offers digital financial services for immigrants and has a market capitalization of $3.008 billion [2] - Remitly's stock traded between $12.08 and $27.32 over the past 52 weeks, closing at $14.39 on January 26, 2026 [2] - Despite robust quarterly earnings, Remitly's stock underperformed due to management's guidance indicating a deceleration in revenue growth [3] - The tempered outlook is attributed to challenging year-over-year comparisons and immigration-related headwinds affecting remittance volumes [3] - Remitly continues to expand its market presence despite a temporarily subdued demand environment [3]

Group 1 - The article emphasizes the importance of considering dividend-paying stocks for long-term investment portfolios, highlighting their stability compared to growth stocks which can be more volatile and overvalued [1][2] - Companies that pay dividends typically have reliable income streams, making them less likely to cut or eliminate dividends during tough times, which is a significant concern for investors [2] Group 2 - Pfizer (NYSE: PFE) currently offers a dividend yield of 6.7%, but has faced challenges due to decreased demand for its COVID-19 vaccine and treatment, as well as expiring patent protections on some drugs [4][6] - Pfizer is actively working to improve its growth prospects through investments in oncology and a licensing deal with YaoPharma for a GLP-1 drug, while also committing to maintaining and growing its dividend over time [5][6] - The stock is considered attractively valued with a forward-looking price-to-earnings (P/E) ratio of 8.7, below its five-year average of 9.7 [6] Group 3 - Western Union (NYSE: WU) boasts a higher dividend yield of 10.14%, and when including stock buybacks, its total shareholder yield reaches 17% [9] - The company has a long history dating back to 1851 and has adapted its business model multiple times, currently exploring cryptocurrency and planning a stablecoin and digital money transfer network to stay relevant [10]

Core Viewpoint - The article expresses serious concerns regarding Western Union's new strategic focus on developing a stablecoin cryptocurrency, indicating potential risks associated with this shift in strategy [1]. Group 1: Company Strategy - Western Union is shifting its strategic focus towards the development of a stablecoin cryptocurrency, which raises concerns about the company's direction and potential implications for its business model [1]. Group 2: Analyst Perspective - The analyst emphasizes the importance of identifying companies with durable competitive advantages and strong balance sheets, suggesting a cautious approach to investing in such companies when their shares are available at irrational prices [1].

Core Insights - The Western Union Company (WU) is a prominent player in the financial services sector, known for its extensive global reach and established brand recognition [1] Company Overview - Western Union operates in various regions worldwide, providing money transfer and payment services [1] - The company is characterized by its large scale and significant market presence, making it a noteworthy stock in the financial market [1] Investment Perspective - The analysis emphasizes a fundamental approach to investment, focusing on identifying undervalued stocks with potential for growth, which may apply to Western Union [1]

Core Insights - The Western Union Company (WU) is positioned for growth due to declining expenses, strong performance in Consumer Services and Branded Digital businesses, and investments to enhance digital capabilities [1][10] - The company has a market capitalization of $2.9 billion and is currently rated Zacks Rank 2 (Buy), indicating solid investment prospects [2] Financial Performance - The Zacks Consensus Estimate for WU's current-year earnings is $1.73 per share, with two upward revisions in the past 60 days [3] - Revenue estimates for 2025 and 2026 are approximately $4.09 billion and $4.11 billion, respectively, supported by growth in high-demand remittance corridors like Latin America [5] - WU's shares have decreased by 12.5% over the past year, compared to an 8.4% decline in the industry [3] Valuation Metrics - WU's forward 12-month price-to-earnings ratio is 5.24X, significantly lower than its five-year median of 7.54X and the industry average of 21.16X, indicating the stock is more affordable [4] - The company has a Value Score of A, suggesting it is undervalued relative to its peers [4] Operational Efficiency - WU has successfully reduced total expenses by 9% in 2022, with further reductions of 1.4% in 2023, 1.6% in 2024, and 5% in the first nine months of 2025 [6] - The adjusted operating margin is expected to be between 19% and 21% for 2025, benefiting from ongoing cost-reduction strategies [6][10] Shareholder Returns - WU offers an attractive dividend yield of 10.05%, significantly higher than the industry average of 0.68% [7] - In 2024, WU returned $496 million to shareholders, including $318 million in dividends and $177 million in share repurchases [7] - As of September 30, 2025, WU had $800.3 million authorized for further share repurchases [7] Strategic Growth Initiatives - The acquisition of International Money Express, Inc. (IMXI) for $500 million is expected to be a major growth driver, enhancing WU's presence in markets with large migrant populations and increasing digital adoption [5] - The transaction is anticipated to close by mid-2026, aligning with WU's expansion plans [5]

Core Insights - Western Union (WU) has partnered with Deutsche Post to enhance its cross-border money transfer services in Germany, starting in Q2 2026 [2][10] - This partnership will significantly expand WU's physical presence in Germany, facilitating easier access to its services for customers [2][5] - Deutsche Post operates over 12,600 postal branches, which will now offer additional financial services through this collaboration [3][10] Company Strategy - Retail partnerships are a fundamental aspect of WU's strategy, complementing its expanding digital channels [4][10] - Germany has been a key market for WU since 1991, and this new agreement builds on existing partnerships with financial institutions and WU's own locations [4][10] - The partnership is expected to strengthen WU's competitive position amid increasing competition from digital-first fintech companies [5][10] Financial Performance - WU reported a 5% year-over-year growth in cross-border principal in Q3 2025, indicating positive momentum in its transaction activities [5][10] - The financial impact of this partnership may be gradual in the near term, but it is anticipated to enhance consumer convenience and competitive advantage in the European remittance market over the long term [6][10] Market Position - Over the past year, WU shares have decreased by 10.6%, while the industry has seen a decline of 7% [7]

Core Insights - The Western Union Company has announced a partnership with Deutsche Post, which is Europe's largest postal network [1] - Cross-border money transfer services will be available to customers in Germany starting in the second quarter of 2026 [1] - The service will be accessible in the majority of Deutsche Post partner branches across Germany [1]

Core Insights - The Western Union Company has announced a partnership with Deutsche Post, which is Europe's largest postal network [1] - Cross-border money transfer services will be available to customers in Germany starting in the second quarter of 2026 [1] - The service will be accessible in the majority of Deutsche Post partner branches across Germany [1]

Summary of Western Union Company Conference Call Company Overview - **Company**: Western Union Company (NYSE: WU) - **Event**: 2025 Conference on December 02, 2025 - **Speakers**: Matthew Cagwin (CFO), Tom Hadley (Head of Corporate Development and Investor Relations) Key Points Industry and Business Strategy - **Beyond Remittance Strategy**: Western Union is focusing on expanding beyond its traditional remittance business, which still constitutes $3.5 billion of its overall revenue. The company aims to double its consumer service products over the next three years, having already achieved a 49% growth in the last quarter [4][5][3]. - **Consumer Services Expansion**: The company has diversified its offerings to include wallet services, prepaid business, and a media network, with a recent acquisition in the Travel Money sector expected to grow from $100 million to $250 million by the end of three years [7][8]. North America Retail Business - **Stabilization**: The North America retail business has faced macro-related pressures but has stabilized with consistent performance over the last two quarters. The company anticipates easier comparisons in the second quarter of the following year [10][13]. - **Intermex Acquisition**: Western Union is acquiring Intermex, a $650 million business, at an attractive valuation of about five times EBITDA. This acquisition is expected to enhance Western Union's market presence and operational capabilities in North America [16][17]. Digital Strategy - **Debit Acceptance**: The company is rolling out debit card acceptance in the U.S., following successful implementation in Europe. This strategy has resulted in higher transaction values and customer retention [25][26]. - **Digital-First Strategy**: Western Union has seen strong growth in its digital services, with eight consecutive quarters of mid-single-digit revenue growth. The company is focusing on market-based pricing and enhancing its digital platform [36][37]. Financial Outlook - **Medium-Term Financial Targets**: Western Union projects overall revenue growth of over 20% in the next three years, driven by the Intermex acquisition and growth in branded digital and consumer services, each contributing approximately $500 million [59][60]. - **Earnings Growth**: The company aims to grow its EPS to $2.30, representing a 30% increase over three years, supported by revenue growth and cost optimization initiatives [59][60]. Operational Efficiency - **Cost Savings Initiatives**: Western Union has successfully achieved its previous cost-saving target of $150 million two and a half years ahead of schedule and has set a new goal to save another $150 million, focusing on AI technologies and process improvements [61][62]. Regional Performance - **APAC and Middle East Growth**: The APAC region is experiencing strong growth, with new digital initiatives being launched, while the Middle East continues to benefit from significant migration and ethnic diversity, driving business [33][34]. Customer Retention and Unit Economics - **Account Payout Transactions**: Account payout transactions have been growing at over 30%, indicating a shift towards digital and account-based transactions, which enhance customer retention and lifetime value [49][50]. Competitive Landscape - **Market Stability**: The competitive landscape has remained stable, with no significant changes in customer acquisition costs or competitive bidding for keywords [38][41]. Additional Insights - **Technological Advancements**: Western Union has modernized its point of sale systems, allowing for rapid updates and improved customer service [28][29]. - **Stablecoin Strategy**: The company is exploring a stablecoin strategy to enhance liquidity and operational efficiency, aiming to leverage digital currencies for real-time payments [43][44]. This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Western Union's focus on growth, digital transformation, and operational efficiency.