Western Union Raises Quarterly Dividend 25% To 10 Cents A Share
08 2월 2012 - 5:03AM
Dow Jones News
Western Union Co. (WU) said Tuesday it is increasing its
quarterly dividend 25% as it faces antsy investors who are looking
for the money-transfer company to accelerate growth.
The increase raises the dividend to 10 cents per share from
eight cents. The dividend is payable March 30 to shareholders of
record as of March 16.
Western Union, which plans to report fourth-quarter results
after the market's close Tuesday, relies on a network of 485,000
agent locations, including check cashers, payday lenders, banks,
supermarkets and other retailers, to sell its services, which allow
customers to send money overseas, pay bills and load money on
prepaid cards for a fee. Many of Western Union's customers are
immigrants and low-income consumers who use its services to send
money to family members in foreign countries.
Most of Western Union's revenue comes from consumer-to-consumer
payment services, though the company has been trying to build
services for business customers. In November, the company closed on
the acquisition of Travelex Holdings Ltd.'s business-payments unit
for about $1 billion.
In December, some investors had been expecting the company to
raise its dividend, though it kept it at eight cents a share at the
time.
"With a payout ratio of 18%, Western Union's dividend is too
small... for a mature financial technology company with 2012
estimated free cash flow of $1.1 billion," David Togut, an analyst
with Evercore Partners, wrote in a research note in December.
Western Union last announced an increase in May, when it raised
the dividend to eight cents per share from seven cents.
The company's shares were up 0.8% at $19.65. The stock has
fallen 7% over the last year.
-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214;
andrew.r.johnson@dowjones.com
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