Western Union's 9.7% dividend yield shines amid digital rivalry pressures
Western Union remains a major player in global money transfers, reporting $1.03 billion in revenue for the third quarter of 2025. The company's high dividend yield of 9.7% stands out in a market where the S&P 500 averages just 1.1%. Yet, despite its size, the business faces growing pressure from digital rivals like PayPal and Revolut.
Over the past decade, Western Union's dominance has weakened as digital competitors gain ground. Between 2021 and 2025, its share of the digital money transfer market fell from 15% to 8%. Meanwhile, Wise grew from 5% to 18%, PayPal expanded from 12% to 20%, and Revolut surged from 2% to 12%. These rivals attract customers with lower fees and smoother online experiences.
The company's financial health shows signs of strain. Gross profit margins have dropped from around 45% a decade ago to the low 30% range today. Revenue has also declined, reflecting the shift toward faster, cheaper digital alternatives.
In response, Western Union has been updating its business model to strengthen its digital services. The stock currently trades at a discount, with price-to-earnings and price-to-book ratios below their five-year averages. Its dividend payout ratio sits at a manageable 40%, offering stability for income-focused investors.
Western Union's high dividend yield makes it appealing to those seeking regular income, though growth may remain limited. The company's efforts to modernise could help it compete, but its market position continues to shrink against faster-moving digital rivals like PayPal and Revolut. For now, its stock remains undervalued by traditional measures, making it an attractive option for investors looking for a steady return on their stock market today.
