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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