-->

The Clash of the Finance Titans

Post a Comment
Shield

AN OXFORD CLUB PUBLICATION

Loyal reader since October 2021

Wealthy Retirement

SPONSORED

Something huge happened on June 30

Google just announced a partnership that could trigger an energy market shock, supercharge the AI revolution, and save homeowners tens of thousands of dollars.

According to one former Google insider, the technology at the center of this deal “could be even more important than the industrial revolution.”

Click here for the full story.

The Clash of the Finance Titans

John Oravec, Research Analyst, The Oxford Club

John Oravec

Recently, we've received several Safety Net requests that all fall under the same field: finance. Those names are T. Rowe Price (Nasdaq: TROW), Western Union (NYSE: WU), and Peoples Bancorp (Nasdaq: PEBO).

So, while Chief Income Strategist Marc Lichtenfeld is out this week, I thought it would be fun to shake things up a bit and review all three of these stocks at one time - pitting them against one another to find the ultimate champion.

Let's start by looking at T. Rowe Price, an investment management firm similar to Vanguard or Fidelity. A huge amount of the company's income comes from investment advisory fees, and revenue has seen a steady increase in the past year. At current prices, the stock yields 4.8%.

Free cash flow took a massive hit in both 2022 and 2023. However, 2024 saw a bounce back with a 38.5% gain, and free cash flow is projected to nearly double this year.

Chart: T. Rowe Price
View larger image
 

A major downside is that T. Rowe Price's dividend payout ratio currently sits at 90%, which is above our threshold of 75%. The good news is that the company has increased its dividend every year for the last decade, earning it some brownie points.

Next, let's talk about Western Union. This company specializes in money transfer, allowing its customers to securely send money to people or businesses across borders. The company covers the areas that banks can't by acting as a liaison for those that don't have a bank account or who need cash immediately. (A bank wire transfer can take one to three days.)

Turning to the safety of its dividend, we see a couple of red flags that could jeopardize its attractive 11.2% yield.

SPONSORED

Why 99% of Americans Will Miss the Biggest Transportation Revolution Since the Automobile

The $34 trillion robotaxi market is forming right now. Not next year. Not "someday." NOW.

While others debate whether self-driving cars are "safe," smart investors are quietly positioning themselves in the companies building this future.

Marc Lichtenfeld reveals which established businesses are already profiting from the autonomous vehicle supply chain.

Discover the companies before the crowd catches on

First off, Western Union's free cash flow has been all over the place. It peaked in 2021 at $900 million but has been bouncing around ever since. Free cash flow in 2024 was down 50% from the previous year and down 60% from three years prior.

Chart: Western Union
View larger image
 

On top of that, Western Union announced in August that it will be acquiring International Money Express (Nasdaq: IMXI), which will result in a major hit to the company's free cash flow.

The company's dividend payout ratio, just like T. Rowe Price's, is sitting above our 75% threshold at 90%.

Finally, let's look at Peoples Bancorp, a company that provides banking services from Ohio to Maryland. The stock yields a solid 5.5%.

The company's biggest revenue source is net interest income, or NII - the difference between the money it earns from loans and investments and the interest expense it pays on deposits. We will be using that metric to measure free cash flow.

NII is up both on the year and over the last three years. The forward-looking estimates predict an even larger increase this year.

The company's payout ratio currently sits at 16%, well below our 75% threshold. Its balance sheet looks stellar as well.

On top of all of that, Peoples Bancorp has increased its dividend every year for the past 10 years.

Chart: 10 Years and Counting
View larger image
 

Now, it's time to reveal the results of our first-ever Clash of the Finance Titans (it's a working title).

Which company will emerge victorious?

Find Out All 3 Grades Here!
What's the #1 indicator of a stock's success? Find out what it is here.

Discover the Top Passive Income Opportunity for 2025...

Odd Monthly Event Could More Than Triple Your Money

SPONSORED

Revealed: White House Plans to Catapult American Oil and Gas Production.

Income Strategist, Marc Lichtenfield say this is his #1 Play to profit from the energy boost.

Donald Trump operating a oil rig
 

Click for details.

Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter