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The DividendRank formulation at Dividend Channel ranks a protection universe of thousands of dividend shares, in keeping with a proprietary formulation designed to establish these shares that mix two essential traits — sturdy fundamentals and a valuation that appears cheap. Western Union presently has an above-ordinary rank, within the high 50% of the protection universe, which suggests it’s among the many high most “fascinating” concepts that benefit additional analysis by buyers.
Start slideshow: 10 Oversold Dividend Stocks »
However, making Western Union an much more fascinating and well-timed inventory is the truth that in buying and selling on Tuesday, shares of WU entered into oversold territory, altering arms as little as $10.765 per share. We outline oversold territory utilizing the Relative Energy Index, or RSI, a technical evaluation indicator used to measure momentum on a scale of zero to 100. An inventory is considered oversold if the RSI studying falls under 30.
Within the case of Western Union, the RSI studying has hit 29.2 — by comparability, the universe of dividend shares coated by Dividend Channel currently has a mean RSI of 46.0. A falling inventory worth — all else equal — creates a more excellent alternative for dividend buyers to seize the subsequent yield. Certainly, WU’s latest annualized dividend of 0.94/share (at present paid in quarterly installments) works out to an annual output of 8.50%, primarily based upon the latest $11.06 share worth.
A bullish investor may look at WU’s 29.2 RSI study at present as an indication that the latest heavy promoting is within the technique of exhausting itself and starting to search for entry-level alternatives on the purchase facet. Among the many elementary data points dividend buyers should examine to determine if they’re bullish on WU is it’s historical dividend past. Dividends are usually not always predictable; however, trying on the past historical chart can assist in judging whether or not the newest compensation is prone to proceed.
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