Analyzing FleetCor Technologies (FLT) and Western Union Company (The) (NYSE:WU)

FleetCor Technologies (NYSE: FLT) and Western Union Company (The) (NYSE:WU) are both mid-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Volatility & Risk

FleetCor Technologies has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, Western Union Company (The) has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Dividends

Western Union Company (The) pays an annual dividend of $0.70 per share and has a dividend yield of 3.5%. FleetCor Technologies does not pay a dividend. Western Union Company (The) pays out 179.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FleetCor Technologies has raised its dividend for 2 consecutive years.

Earnings & Valuation

This table compares FleetCor Technologies and Western Union Company (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FleetCor Technologies $2.06 billion 7.38 $1.11 billion $5.06 32.68
Western Union Company (The) $5.43 billion 1.73 $1.35 billion $0.39 51.95

Western Union Company (The) has higher revenue and earnings than FleetCor Technologies. FleetCor Technologies is trading at a lower price-to-earnings ratio than Western Union Company (The), indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

97.7% of FleetCor Technologies shares are held by institutional investors. 4.3% of FleetCor Technologies shares are held by insiders. Comparatively, 1.1% of Western Union Company (The) shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares FleetCor Technologies and Western Union Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FleetCor Technologies 23.28% 20.87% 6.85%
Western Union Company (The) 3.50% 92.41% 9.04%

Analyst Ratings

This is a summary of current recommendations and price targets for FleetCor Technologies and Western Union Company (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FleetCor Technologies 0 0 12 1 3.08
Western Union Company (The) 3 5 1 0 1.78

FleetCor Technologies currently has a consensus target price of $180.09, suggesting a potential upside of 8.90%. Western Union Company (The) has a consensus target price of $20.38, suggesting a potential upside of 0.57%. Given FleetCor Technologies’ stronger consensus rating and higher probable upside, equities analysts clearly believe FleetCor Technologies is more favorable than Western Union Company (The).

Summary

FleetCor Technologies beats Western Union Company (The) on 13 of the 18 factors compared between the two stocks.

About FleetCor Technologies

FleetCor Technologies, Inc. is a provider of workforce payment products. The Company offers fuel card payments product solutions, corporate payments products, toll products, lodging cards and gift cards. The Company operates through two segments: North America and International. Its products are sold to businesses, retailers, oil companies and marketers and government entities. Its payment programs enable its customers to manage and control their commercial payments, card programs, and employee spending and provide card-accepting merchants with a customer base that can increase their sales and customer loyalty. The Company also provides a suite of fleet related and workforce payment products, including mobile telematics services, fleet maintenance management and employee benefit and transportation related payments. As of December 31, 2016, its products were used in 53 countries around the world, with its primary geographies in the United States, Brazil and the United Kingdom.

About Western Union Company (The)

The Western Union Company (Western Union) is a provider of money movement and payment services. The Company operates through three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. The Company’s Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company’s Consumer-to-Business segment provides options to make one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies. Its Consumer-to-Business payments services are available through a range of services that include Speedpay, Pago Facil and Western Union Payments. Western Union’s Business Solutions segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.

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