United Parcel ServiceNYSE:UPS Stock Report
United Parcel Service Competitors
Price History & Performance
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Recent News & UpdatesOct 14
Is UPS Stock A Buy Or Sell During The Dip?
Favorable e-commerce trends should drive growth. UPS' massive package sortation footprint, immense air and delivery fleet, and global operations provide a deep, wide moat. Parcel carriers like UPS have pricing power in an inflationary environment.
UPS: 'Better Not Bigger' Strategy Makes It A Buy
UPS's new strategy called "Better Not Bigger" changes the strategic priorities of the company and should make it a more intelligent capital allocator. UPS is also benefiting from the massive e-commerce growth that the Covid pandemic brought. We believe shares are fairly valued and priced to deliver high-single-digit returns.
A Look At The Fair Value Of United Parcel Service, Inc. (NYSE:UPS)
In this article we are going to estimate the intrinsic value of United Parcel Service, Inc. ( NYSE:UPS ) by taking the
United Parcel Service's (NYSE:UPS) Returns On Capital Not Reflecting Well On The Business
If you're looking for a multi-bagger, there's a few things to keep an eye out for. One common approach is to try and
Is Now An Opportune Moment To Examine United Parcel Service, Inc. (NYSE:UPS)?
Let's talk about the popular United Parcel Service, Inc. ( NYSE:UPS ). The company's shares received a lot of attention
|UPS||US Logistics||US Market|
Return vs Industry: UPS exceeded the US Logistics industry which returned % over the past year.
Return vs Market: UPS underperformed the US Market which returned % over the past year.
Stable Share Price: UPS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: UPS's weekly volatility (3%) has been stable over the past year.
About the Company
United Parcel Service, Inc. provides letter and package delivery, transportation, logistics, and financial services. It operates through three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight.
United Parcel Service Fundamentals Summary
|UPS fundamental statistics|
Earnings & Revenue
|UPS income statement (TTM)|
|Cost of Revenue||US$b|
Last Reported Earnings
Next Earnings Date
|Earnings per share (EPS)|
|Net Profit Margin||%|
How did UPS perform over the long term?See historical performance and comparison
%Current Dividend Yield
Is United Parcel Service undervalued compared to its fair value and its price relative to the market?
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: UPS ($) is trading above our estimate of fair value ($)
Significantly Below Fair Value: UPS is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: UPS is poor value based on its PE Ratio (28x) compared to the US Logistics industry average (20x).
PE vs Market: UPS is poor value based on its PE Ratio (28x) compared to the US market (x).
Price to Earnings Growth Ratio
PEG Ratio: UPS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: UPS is overvalued based on its PB Ratio (x) compared to the US Logistics industry average (x).
How is United Parcel Service forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: UPS's earnings are forecast to decline over the next 3 years (% per year).
Earnings vs Market: UPS's earnings are forecast to decline over the next 3 years (% per year).
High Growth Earnings: UPS's earnings are forecast to decline over the next 3 years.
Revenue vs Market: UPS's revenue (% per year) is forecast to grow slower than the US market (% per year).
High Growth Revenue: UPS's revenue (% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: UPS's Return on Equity is forecast to be very high in 3 years time (%).
How has United Parcel Service performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: UPS has high quality earnings.
Growing Profit Margin: UPS's current net profit margins (%) are higher than last year (%).
Past Earnings Growth Analysis
Earnings Trend: UPS's earnings have grown by % per year over the past 5 years.
Accelerating Growth: UPS's earnings growth over the past year (%) exceeds its 5-year average (% per year).
Earnings vs Industry: UPS earnings growth over the past year (%) underperformed the Logistics industry %.
Return on Equity
High ROE: Whilst UPS's Return on Equity (%) is outstanding, this metric is skewed due to their high level of debt.
How is United Parcel Service's financial position?
Financial Position Analysis
Short Term Liabilities: UPS's short term assets ($B) exceed its short term liabilities ($B).
Long Term Liabilities: UPS's short term assets ($B) do not cover its long term liabilities ($B).
Debt to Equity History and Analysis
Debt Level: UPS's debt to equity ratio (%) is considered high.
Reducing Debt: UPS's debt to equity ratio has reduced from % to % over the past 5 years.
Debt Coverage: UPS's debt is well covered by operating cash flow (%).
Interest Coverage: UPS earns more interest than it pays, so coverage of interest payments is not a concern.
What is United Parcel Service current dividend yield, its reliability and sustainability?
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: UPS's dividend (%) is higher than the bottom 25% of dividend payers in the US market (%).
High Dividend: UPS's dividend (%) is low compared to the top 25% of dividend payers in the US market (%).
Stability and Growth of Payments
Stable Dividend: UPS's dividends per share have been stable in the past 10 years.
Growing Dividend: UPS's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonable payout ratio (%), UPS's dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: UPS's dividends in 3 years are forecast to be well covered by earnings (% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Ms. Carol B. Tome serves as the Chief Financial Officer and Executive Vice President of Corporate Services at Home Depot U.S.A., Inc. Ms. Tome has been Chief Executive Officer and Director of United Parcel
CEO Compensation Analysis
Compensation vs Market: Carol's total compensation ($USDM) is below average for companies of similar size in the US market ($USDM).
Compensation vs Earnings: Carol's compensation has increased by more than 20% in the past year.
Experienced Management: UPS's management team is considered experienced ( years average tenure).
Experienced Board: UPS's board of directors are considered experienced ( years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
United Parcel Service, Inc.'s employee growth, exchange listings and data sources
- Name: United Parcel Service, Inc.
- Ticker: UPS
- Exchange: NYSE
- Industry: Air Freight and Logistics
- Sector: Transportation
- Market Cap: US$b
- Shares outstanding: m
- Website: https://www.ups.com
Number of Employees
- United Parcel Service, Inc.
- 55 Glenlake Parkway, N.E.
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|End of Day Share Price||/10/20|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
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United Parcel Service Inc. Cl B
United Parcel Service, Inc. operates as a logistics and package delivery company that provides supply chain management services. Its logistics services include transportation, distribution, contract logistics, ground freight, ocean freight, air freight, customs brokerage, insurance, and financing. The firm operates through the following segments: U.S. Domestic Package, International Package, and Supply Chain and Freight. The U.S. Domestic Package segment offers a full spectrum of U.S. domestic air and ground package transportation services. The International Package segment consists of small package operations in Europe, Asia Pacific, Canada, Latin America and the Indian sub-continent, Middle East and Africa (ISMEA) and offers a selection of day and time definite international shipping services. The Supply Chain & Freight consists of forwarding, truckload brokerage, logistics, UPS Freight, UPS Capital and other businesses. The company was founded by James E. Casey and Claude Ryan on August 28, and is headquartered in Atlanta, GA.
United Parcel Service Inc. (UPS) Stock , UPS
United Parcel Service is an American multinational shipping & receiving and supply chain management company founded in Originally known as the American Messenger Company specializing in telegraphs, UPS has grown to become a Fortune company and one of the world's largest shipping couriers. UPS today is primarily known for its ground shipping services as well as the UPS Store, a retail chain which both assists UPS shipments as well as provides tools for small businesses. In addition, UPS offers air shipping on an overnight or 2-day basis and delivers to PO Boxes through UPS SurePost, a subsidiary that passes on packages to the United States Postal Service for last mile delivery. UPS is the largest courier company in the world by revenue, with annual revenues around $85 Billion USD in , ahead of competitors DHL and FedEx. UPS' main international hub, UPS Worldport in Louisville, Kentucky, is the fifth busiest airport in the world by cargo traffic based on preliminary statistics from ACI, and the third busiest in the United States behind FedEx's Memphis Superhub and Ted Stevens Anchorage International Airport. Wikipedia
After FedEx's Warning, What Can Investors Expect From UPS?
FedEx's (NYSE:FDX) earnings shocked the market in late September, and there's a real fear that UPS(NYSE:UPS) will follow suit when it reports results on Oct. A lot is going on, so here's a brief summation of what investors need to look out for when UPS shares its third-quarter earnings.
I'll cut to the chase. The key number to focus on is the U.S. domestic package segment profit margin. But it's not just about one number, of course; it's about the factors that go together to produce the metric and what investors can expect in the future.
A breakout of adjusted operating profit by segment is in the table below. Not only is the U.S. domestic package segment the key profit generator at the company, but it's also forecast to produce the bulk of the company's profit increase in the coming years.
Image source: Getty Images.
For example, at the investor day presentation in June, management outlined plans to increase adjusted operating profit from $ billion in to $ billion-$14 billion in The other primary segment, international package, is forecast to increase adjusted operating profit from $ billion in to $ billion-$ billion, mainly due to revenue increases from market share gains and international expansion.
Moreover, the third segment is now called supply chain solutions following the sale of UPS Freight. Everything points to the U.S. domestic package segment as the key to UPS' prospects.
Within that, UPS has plans to increase the U.S. domestic package margin segment to %% from % in That's why the segment's margin performance matters so much.
Adjusted Operating Profit
U.S. domestic package
Supply chain and freight
Data source: UPS presentations.
UPS margin plans
The segment's margin outlook has been at the heart of the debate over the stock in recent years. When UPS' management demonstrates it can increase it, the stock gets rewarded; when there are difficulties, it gets punished. As such, the market took to heart CEO Carol Tomé's appointment in and her subsequent "better, not bigger" framework. In other words, Tomé wants to focus on improving productivity and profitability rather than just chasing revenue growth.
Tomé is undoubtedly taking the right approach. There's never been any doubt that e-commerce volume would grow. However, there's been plenty of debate on whether UPS and FedEx might be trapped in a never-ending game of spending to ramp up capacity while at the same time facing margin challenges from making costly deliveries to residential addresses.
Image source: Getty Images.
Tomé's plan involves expanding sales with small and medium-sized businesses (particularly as they increase their e-commerce activities), growing UPS' presence in healthcare, and being willing to forego revenue growth to ensure revenue quality.
The good and bad news
The good news is that on the second-quarter earnings call, UPS' management said it was on track for a U.S. domestic package margin of % in That's a perfectly respectful figure. It's not that far from the bottom end of the %% range targeted for
The bad news is that the margin progression through might not be quite as good as many hoped. There are two reasons for this. First, investors were left disappointed on the second-quarter earnings call when management guided toward a U.S. domestic package margin of % in the second half compared to 11% in the first half.
Second, FedEx's stock slumped in late September on the news that the company suffered an extra $ million in costs due to "constrained labor markets" during its fiscal first-quarter earnings. In plain English, the lingering impact of the COVID pandemic is making it hard for FedEx to hire staff and therefore burdening the company with extra costs, such as third-party transportation and higher wages.
Image source: Getty Images.
It's hard not to think that UPS will face similar sorts of issues when it reports. Moreover, the annual question of how FedEx and UPS will deal with the surge of demand during peak delivery days in the Thanksgiving to Christmas period will be even more relevant this year.
What to look out for
All told, management's commentary on U.S. domestic margin will be closely followed by investors in the upcoming results. Don't be surprised if UPS reports some of the issues that FedEx talked about, and that could mean the segment's margin performance will be weaker than many hoped. That said, investors will look for management to demonstrate that underlying progress toward its targets is progressing as planned.
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I'm just saying that I don't like it, that's all. I shrugged. She took a pack, pulled out a cigarette. Lesya, well, not with me.