UNITED PARCEL SERVICE-CL B (UPS)

US9113121068 - Common Stock

125.68  +3.03 (+2.47%)

After market: 125.68 0 (0%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to UPS. UPS was compared to 20 industry peers in the Air Freight & Logistics industry. While UPS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. UPS has a valuation in line with the averages, but it does not seem to be growing. UPS also has an excellent dividend rating. With these ratings, UPS could be worth investigating further for dividend investing!.



9

1. Profitability

1.1 Basic Checks

UPS had positive earnings in the past year.
UPS had a positive operating cash flow in the past year.
In the past 5 years UPS has always been profitable.
In the past 5 years UPS always reported a positive cash flow from operatings.

1.2 Ratios

UPS has a better Return On Assets (8.30%) than 84.21% of its industry peers.
UPS's Return On Equity of 33.61% is amongst the best of the industry. UPS outperforms 94.74% of its industry peers.
With a decent Return On Invested Capital value of 11.84%, UPS is doing good in the industry, outperforming 78.95% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for UPS is significantly above the industry average of 10.81%.
The last Return On Invested Capital (11.84%) for UPS is well below the 3 year average (17.31%), which needs to be investigated, but indicates that UPS had better years and this may not be a problem.
Industry RankSector Rank
ROA 8.3%
ROE 33.61%
ROIC 11.84%
ROA(3y)14.76%
ROA(5y)10.82%
ROE(3y)62.52%
ROE(5y)105.58%
ROIC(3y)17.31%
ROIC(5y)15.96%

1.3 Margins

UPS has a better Profit Margin (6.25%) than 84.21% of its industry peers.
In the last couple of years the Profit Margin of UPS has grown nicely.
With an excellent Operating Margin value of 8.90%, UPS belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
In the last couple of years the Operating Margin of UPS has remained more or less at the same level.
Looking at the Gross Margin, with a value of 79.88%, UPS belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Gross Margin of UPS has remained more or less at the same level.
Industry RankSector Rank
OM 8.9%
PM (TTM) 6.25%
GM 79.88%
OM growth 3Y0.18%
OM growth 5Y0.56%
PM growth 3Y66.88%
PM growth 5Y2.04%
GM growth 3Y0.53%
GM growth 5Y0.81%

5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), UPS is creating value.
The number of shares outstanding for UPS has been reduced compared to 1 year ago.
The number of shares outstanding for UPS has been reduced compared to 5 years ago.
UPS has a worse debt/assets ratio than last year.

2.2 Solvency

UPS has an Altman-Z score of 3.43. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
UPS's Altman-Z score of 3.43 is fine compared to the rest of the industry. UPS outperforms 63.16% of its industry peers.
The Debt to FCF ratio of UPS is 5.03, which is a neutral value as it means it would take UPS, 5.03 years of fcf income to pay off all of its debts.
UPS's Debt to FCF ratio of 5.03 is fine compared to the rest of the industry. UPS outperforms 73.68% of its industry peers.
UPS has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.21, UPS is not doing good in the industry: 73.68% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.21
Debt/FCF 5.03
Altman-Z 3.43
ROIC/WACC1.41
WACC8.42%

2.3 Liquidity

A Current Ratio of 1.14 indicates that UPS should not have too much problems paying its short term obligations.
UPS has a Current ratio of 1.14. This is comparable to the rest of the industry: UPS outperforms 42.11% of its industry peers.
UPS has a Quick Ratio of 1.14. This is a normal value and indicates that UPS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of UPS (1.14) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 1.14
Quick Ratio 1.14

3

3. Growth

3.1 Past

The earnings per share for UPS have decreased strongly by -24.97% in the last year.
Measured over the past 5 years, UPS shows a small growth in Earnings Per Share. The EPS has been growing by 3.90% on average per year.
Looking at the last year, UPS shows a decrease in Revenue. The Revenue has decreased by -2.57% in the last year.
The Revenue has been growing slightly by 4.83% on average over the past years.
EPS 1Y (TTM)-24.97%
EPS 3Y2.22%
EPS 5Y3.9%
EPS Q2Q%12.1%
Revenue 1Y (TTM)-2.57%
Revenue growth 3Y2.43%
Revenue growth 5Y4.83%
Sales Q2Q%5.62%

3.2 Future

UPS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.35% yearly.
UPS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.09% yearly.
EPS Next Y-14.05%
EPS Next 2Y0.3%
EPS Next 3Y4.53%
EPS Next 5Y7.35%
Revenue Next Year-0.39%
Revenue Next 2Y1.86%
Revenue Next 3Y2.81%
Revenue Next 5Y4.09%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

UPS is valuated correctly with a Price/Earnings ratio of 16.87.
Based on the Price/Earnings ratio, UPS is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of UPS to the average of the S&P500 Index (27.73), we can say UPS is valued slightly cheaper.
With a Price/Forward Earnings ratio of 14.23, UPS is valued correctly.
Based on the Price/Forward Earnings ratio, UPS is valued a bit cheaper than the industry average as 78.95% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.83. UPS is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 16.87
Fwd PE 14.23

4.2 Price Multiples

UPS's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, UPS is valued a bit cheaper than 73.68% of the companies in the same industry.
Industry RankSector Rank
P/FCF 24.61
EV/EBITDA 10.57

4.3 Compensation for Growth

UPS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.32
EPS Next 2Y0.3%
EPS Next 3Y4.53%

7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.32%, UPS is a good candidate for dividend investing.
UPS's Dividend Yield is rather good when compared to the industry average which is at 2.80. UPS pays more dividend than 100.00% of the companies in the same industry.
UPS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 5.32%

5.2 History

The dividend of UPS is nicely growing with an annual growth rate of 12.35%!
UPS has paid a dividend for at least 10 years, which is a reliable track record.
UPS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.35%
Div Incr Years15
Div Non Decr Years25

5.3 Sustainability

95.08% of the earnings are spent on dividend by UPS. This is not a sustainable payout ratio.
The dividend of UPS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP95.08%
EPS Next 2Y0.3%
EPS Next 3Y4.53%

UNITED PARCEL SERVICE-CL B

NYSE:UPS (12/20/2024, 8:04:00 PM)

After market: 125.68 0 (0%)

125.68

+3.03 (+2.47%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)10-24 2024-10-24/bmo
Earnings (Next)01-28 2025-01-28/amc
Inst Owners72.36%
Inst Owner Change2.78%
Ins Owners0%
Ins Owner Change-0.71%
Market Cap107.25B
Analysts73.33
Price Target151.39 (20.46%)
Short Float %1.91%
Short Ratio3.53
Dividend
Industry RankSector Rank
Dividend Yield 5.32%
Dividend Growth(5Y)12.35%
DP95.08%
Div Incr Years15
Div Non Decr Years25
Ex-Date11-18 2024-11-18 (1.63)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.91%
Min EPS beat(2)-10.96%
Max EPS beat(2)7.14%
EPS beat(4)2
Avg EPS beat(4)1.41%
Min EPS beat(4)-10.96%
Max EPS beat(4)10.07%
EPS beat(8)4
Avg EPS beat(8)0.88%
EPS beat(12)8
Avg EPS beat(12)2.8%
EPS beat(16)12
Avg EPS beat(16)8.04%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-2.62%
Max Revenue beat(2)-0.52%
Revenue beat(4)0
Avg Revenue beat(4)-1.96%
Min Revenue beat(4)-2.99%
Max Revenue beat(4)-0.52%
Revenue beat(8)0
Avg Revenue beat(8)-2.77%
Revenue beat(12)2
Avg Revenue beat(12)-1.76%
Revenue beat(16)5
Avg Revenue beat(16)-0.07%
PT rev (1m)2.47%
PT rev (3m)2.91%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.13%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)0.83%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.04%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-1.09%
Valuation
Industry RankSector Rank
PE 16.87
Fwd PE 14.23
P/S 1.18
P/FCF 24.61
P/OCF 11.63
P/B 6.36
P/tB 11.49
EV/EBITDA 10.57
EPS(TTM)7.45
EY5.93%
EPS(NY)8.83
Fwd EY7.03%
FCF(TTM)5.11
FCFY4.06%
OCF(TTM)10.8
OCFY8.59%
SpS106.27
BVpS19.75
TBVpS10.94
PEG (NY)N/A
PEG (5Y)4.32
Profitability
Industry RankSector Rank
ROA 8.3%
ROE 33.61%
ROCE 15.17%
ROIC 11.84%
ROICexc 13.37%
ROICexgc 15.9%
OM 8.9%
PM (TTM) 6.25%
GM 79.88%
FCFM 4.81%
ROA(3y)14.76%
ROA(5y)10.82%
ROE(3y)62.52%
ROE(5y)105.58%
ROIC(3y)17.31%
ROIC(5y)15.96%
ROICexc(3y)20.61%
ROICexc(5y)18.79%
ROICexgc(3y)24.46%
ROICexgc(5y)22.21%
ROCE(3y)22.18%
ROCE(5y)20.71%
ROICexcg growth 3Y-2.44%
ROICexcg growth 5Y-1.55%
ROICexc growth 3Y-3.57%
ROICexc growth 5Y-1.5%
OM growth 3Y0.18%
OM growth 5Y0.56%
PM growth 3Y66.88%
PM growth 5Y2.04%
GM growth 3Y0.53%
GM growth 5Y0.81%
F-Score6
Asset Turnover1.33
Health
Industry RankSector Rank
Debt/Equity 1.21
Debt/FCF 5.03
Debt/EBITDA 1.75
Cap/Depr 136.63%
Cap/Sales 5.36%
Interest Coverage 250
Cash Conversion 79.3%
Profit Quality 76.91%
Current Ratio 1.14
Quick Ratio 1.14
Altman-Z 3.43
F-Score6
WACC8.42%
ROIC/WACC1.41
Cap/Depr(3y)148.29%
Cap/Depr(5y)183.16%
Cap/Sales(3y)4.91%
Cap/Sales(5y)5.95%
Profit Quality(3y)80.15%
Profit Quality(5y)133.43%
High Growth Momentum
Growth
EPS 1Y (TTM)-24.97%
EPS 3Y2.22%
EPS 5Y3.9%
EPS Q2Q%12.1%
EPS Next Y-14.05%
EPS Next 2Y0.3%
EPS Next 3Y4.53%
EPS Next 5Y7.35%
Revenue 1Y (TTM)-2.57%
Revenue growth 3Y2.43%
Revenue growth 5Y4.83%
Sales Q2Q%5.62%
Revenue Next Year-0.39%
Revenue Next 2Y1.86%
Revenue Next 3Y2.81%
Revenue Next 5Y4.09%
EBIT growth 1Y-18.18%
EBIT growth 3Y2.62%
EBIT growth 5Y5.41%
EBIT Next Year24.48%
EBIT Next 3Y15.83%
EBIT Next 5Y9.73%
FCF growth 1Y-56.92%
FCF growth 3Y0.22%
FCF growth 5Y-4.6%
OCF growth 1Y-34.24%
OCF growth 3Y-0.71%
OCF growth 5Y-4.23%