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The Western Union Company Message Board

  • redheadinvestor@ymail.com redheadinvestor May 7, 2013 4:00 PM Flag

    Eventual share count: ~555 M?

    End 1Q: 570 M (rounded, source: 10Q)

    Management statements on call:
    - Returning $700 M to shareholders this year
    - Returned $260 M to shareholders in 1Q
    - - $190 M buyback
    - - $70 M dividends
    - Remaining to return to shareholders: $700 - $260 = $440 M
    - Three more Q of dividends (assuming no change in dividend) = $210 M
    - Size of remaining buyback: $440 - $210 = $230 M
    - Number of shares: $ 230 M / $16 = about 15 M
    - Eventual share count: 570 M - 15 M = 555 M

    Likely profit of WU after completion of turnaround: $250 M / Q (MRQ: $217 M, past recent peak: $247 M)
    $1 B annual / 555 M shares = $1.80 EPS annual
    10X = $18 share price
    12X = $21.60 share price
    17X = $30.60 share price (current average S&P multiple)

    Quite a wide range of valuations: Is returning to a more market-comparable multiple likely once the turnaround is completed? I think the answer depends on growth, which is an unknown. I don't think the multiple is likely to get smaller than it is now.

 
WU
17.56+0.68(+4.03%)Feb 12 4:02 PMEST