Western Union (NYSE:WU) & World Acceptance (NASDAQ:WRLD) Financial Review

Western Union (NYSE:WU) and World Acceptance (NASDAQ:WRLD) are both financial services companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Earnings & Valuation

This table compares Western Union and World Acceptance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Union	$4.27 billion	0.95	$626.00 million	$1.69	7.12
World Acceptance	$517.66 million	1.33	$77.35 million	$13.26	8.86

Western Union has higher revenue and earnings than World Acceptance. Western Union is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Western Union has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Western Union and World Acceptance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	3	7	0	0	1.70
World Acceptance	1	0	0	0	1.00

Western Union presently has a consensus target price of $13.14, suggesting a potential upside of 9.16%. World Acceptance has a consensus target price of $56.00, suggesting a potential downside of 52.53%. Given Western Union’s stronger consensus rating and higher possible upside, analysts clearly believe Western Union is more favorable than World Acceptance.

Insider and Institutional Ownership

91.8% of Western Union shares are owned by institutional investors. Comparatively, 83.6% of World Acceptance shares are owned by institutional investors. 0.9% of Western Union shares are owned by company insiders. Comparatively, 40.9% of World Acceptance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Western Union and World Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	13.64%	123.71%	7.43%
World Acceptance	13.80%	18.69%	7.18%

Summary

Western Union beats World Acceptance on 7 of the 13 factors compared between the two stocks.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.

About World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.