UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
NYSE:UPS - New York Stock Exchange, Inc. - US9113121068 - Common Stock - Currency: USD
Taking everything into account, UPS scores 6 out of 10 in our fundamental rating. UPS was compared to 23 industry peers in the Air Freight & Logistics industry. UPS scores excellent on profitability, but there are some minor concerns on its financial health. UPS has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally UPS also has an excellent dividend rating. These ratings would make UPS suitable for dividend investing!
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.
Each year in the past 5 years UPS had a positive operating cash flow.
1.2 Ratios
UPS has a better Return On Assets (8.25%) than 78.26% of its industry peers.
Looking at the Return On Equity, with a value of 34.59%, UPS belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
UPS has a Return On Invested Capital of 12.47%. This is in the better half of the industry: UPS outperforms 78.26% of its industry peers.
UPS had an Average Return On Invested Capital over the past 3 years of 15.05%. This is above the industry average of 12.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.25% | ||
| ROE | 34.59% | ||
| ROIC | 12.47% |
ROA(3y)11.32%
ROA(5y)10.94%
ROE(3y)43.9%
ROE(5y)85.31%
ROIC(3y)15.05%
ROIC(5y)15.77%
1.3 Margins
With an excellent Profit Margin value of 6.35%, UPS belongs to the best of the industry, outperforming 82.61% of the companies in the same industry.
In the last couple of years the Profit Margin of UPS has remained more or less at the same level.
Looking at the Operating Margin, with a value of 9.42%, UPS belongs to the top of the industry, outperforming 82.61% of the companies in the same industry.
UPS's Operating Margin has declined in the last couple of years.
UPS has a Gross Margin of 80.28%. This is amongst the best in the industry. UPS outperforms 100.00% of its industry peers.
In the last couple of years the Gross Margin of UPS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.42% | ||
| PM (TTM) | 6.35% | ||
| GM | 80.28% |
OM growth 3Y-10.47%
OM growth 5Y-2.2%
PM growth 3Y-21.75%
PM growth 5Y1.16%
GM growth 3Y1.64%
GM growth 5Y0.43%
2. Health
2.1 Basic Checks
UPS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, UPS has about the same amount of shares outstanding.
Compared to 5 years ago, UPS has less shares outstanding
The debt/assets ratio for UPS has been reduced compared to a year ago.
2.2 Solvency
UPS has an Altman-Z score of 3.09. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of UPS (3.09) is better than 65.22% of its industry peers.
The Debt to FCF ratio of UPS is 3.43, which is a good value as it means it would take UPS, 3.43 years of fcf income to pay off all of its debts.
UPS has a better Debt to FCF ratio (3.43) than 78.26% of its industry peers.
UPS has a Debt/Equity ratio of 1.16. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of UPS (1.16) is worse than 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 3.43 | ||
| Altman-Z | 3.09 |
ROIC/WACC1.61
WACC7.73%
2.3 Liquidity
A Current Ratio of 1.17 indicates that UPS should not have too much problems paying its short term obligations.
UPS's Current ratio of 1.17 is in line compared to the rest of the industry. UPS outperforms 43.48% of its industry peers.
A Quick Ratio of 1.17 indicates that UPS should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.17, UPS perfoms like the industry average, outperforming 47.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
UPS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -11.96%.
Measured over the past 5 years, UPS shows a small growth in Earnings Per Share. The EPS has been growing by 0.53% on average per year.
UPS shows a small growth in Revenue. In the last year, the Revenue has grown by 0.12%.
UPS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.21% yearly.
EPS 1Y (TTM)-11.96%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%11.34%
Revenue 1Y (TTM)0.12%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%1.54%
3.2 Future
Based on estimates for the next years, UPS will show a small growth in Earnings Per Share. The EPS will grow by 5.03% on average per year.
The Revenue is expected to grow by 2.21% on average over the next years.
EPS Next Y3.2%
EPS Next 2Y7.59%
EPS Next 3Y9.38%
EPS Next 5Y5.03%
Revenue Next Year-3.44%
Revenue Next 2Y-1.08%
Revenue Next 3Y1.12%
Revenue Next 5Y2.21%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.47, UPS is valued correctly.
69.57% of the companies in the same industry are more expensive than UPS, based on the Price/Earnings ratio.
UPS is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 12.09, UPS is valued correctly.
Based on the Price/Forward Earnings ratio, UPS is valued cheaply inside the industry as 86.96% of the companies are valued more expensively.
UPS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.47 | ||
| Fwd PE | 12.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, UPS is valued a bit cheaper than the industry average as 65.22% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, UPS is valued cheaper than 91.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.15 | ||
| EV/EBITDA | 7.92 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
UPS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.9
PEG (5Y)23.73
EPS Next 2Y7.59%
EPS Next 3Y9.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.79%, UPS is a good candidate for dividend investing.
In the last 3 months the price of UPS has falen by -25.67%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
UPS's Dividend Yield is rather good when compared to the industry average which is at 4.11. UPS pays more dividend than 95.65% of the companies in the same industry.
UPS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.79% |
5.2 History
The dividend of UPS is nicely growing with an annual growth rate of 11.18%!
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)11.18%
Div Incr Years15
Div Non Decr Years25
5.3 Sustainability
UPS pays out 93.38% of its income as dividend. This is not a sustainable payout ratio.
UPS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP93.38%
EPS Next 2Y7.59%
EPS Next 3Y9.38%
96.43
+2.23 (+2.37%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)
Earnings (Next)
Inst Owners72.29%
Inst Owner Change0.02%
Ins Owners0%
Ins Owner Change0.96%
Market Cap81.73B
Analysts75.68
Price Target133.24 (38.17%)
Short Float %2.06%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.79% |
Yearly Dividend6.33
Dividend Growth(5Y)11.18%
DP93.38%
Div Incr Years15
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.36%
Min EPS beat(2)7.14%
Max EPS beat(2)7.57%
EPS beat(4)3
Avg EPS beat(4)3.45%
Min EPS beat(4)-10.96%
Max EPS beat(4)10.07%
EPS beat(8)5
Avg EPS beat(8)1.83%
EPS beat(12)8
Avg EPS beat(12)2.22%
EPS beat(16)12
Avg EPS beat(16)7.08%
Revenue beat(2)0
Avg Revenue beat(2)-0.98%
Min Revenue beat(2)-1.45%
Max Revenue beat(2)-0.52%
Revenue beat(4)0
Avg Revenue beat(4)-1.57%
Min Revenue beat(4)-2.62%
Max Revenue beat(4)-0.52%
Revenue beat(8)0
Avg Revenue beat(8)-2.37%
Revenue beat(12)1
Avg Revenue beat(12)-2.02%
Revenue beat(16)4
Avg Revenue beat(16)-0.65%
PT rev (1m)-0.96%
PT rev (3m)-11.82%
EPS NQ rev (1m)-4.2%
EPS NQ rev (3m)-21.06%
EPS NY rev (1m)0.28%
EPS NY rev (3m)-9.68%
Revenue NQ rev (1m)-0.7%
Revenue NQ rev (3m)-6.12%
Revenue NY rev (1m)-0.62%
Revenue NY rev (3m)-7.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.47 | ||
| Fwd PE | 12.09 | ||
| P/S | 0.9 | ||
| P/FCF | 13.15 | ||
| P/OCF | 8.07 | ||
| P/B | 4.89 | ||
| P/tB | 8.74 | ||
| EV/EBITDA | 7.92 |
EPS(TTM)7.73
EY8.02%
EPS(NY)7.98
Fwd EY8.27%
FCF(TTM)7.33
FCFY7.6%
OCF(TTM)11.94
OCFY12.39%
SpS107.45
BVpS19.73
TBVpS11.04
PEG (NY)3.9
PEG (5Y)23.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.25% | ||
| ROE | 34.59% | ||
| ROCE | 15.99% | ||
| ROIC | 12.47% | ||
| ROICexc | 14.13% | ||
| ROICexgc | 16.74% | ||
| OM | 9.42% | ||
| PM (TTM) | 6.35% | ||
| GM | 80.28% | ||
| FCFM | 6.82% |
ROA(3y)11.32%
ROA(5y)10.94%
ROE(3y)43.9%
ROE(5y)85.31%
ROIC(3y)15.05%
ROIC(5y)15.77%
ROICexc(3y)17.25%
ROICexc(5y)18.55%
ROICexgc(3y)20.55%
ROICexgc(5y)21.95%
ROCE(3y)19.3%
ROCE(5y)20.23%
ROICexcg growth 3Y-16.14%
ROICexcg growth 5Y-1.33%
ROICexc growth 3Y-16.33%
ROICexc growth 5Y-1.47%
OM growth 3Y-10.47%
OM growth 5Y-2.2%
PM growth 3Y-21.75%
PM growth 5Y1.16%
GM growth 3Y1.64%
GM growth 5Y0.43%
F-Score7
Asset Turnover1.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 3.43 | ||
| Debt/EBITDA | 1.6 | ||
| Cap/Depr | 108.31% | ||
| Cap/Sales | 4.29% | ||
| Interest Coverage | 10.04 | ||
| Cash Conversion | 83.07% | ||
| Profit Quality | 107.45% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 | ||
| Altman-Z | 3.09 |
F-Score7
WACC7.73%
ROIC/WACC1.61
Cap/Depr(3y)137.05%
Cap/Depr(5y)150.75%
Cap/Sales(3y)4.91%
Cap/Sales(5y)5.08%
Profit Quality(3y)88.01%
Profit Quality(5y)144.74%
High Growth Momentum
Growth
EPS 1Y (TTM)-11.96%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%11.34%
EPS Next Y3.2%
EPS Next 2Y7.59%
EPS Next 3Y9.38%
EPS Next 5Y5.03%
Revenue 1Y (TTM)0.12%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%1.54%
Revenue Next Year-3.44%
Revenue Next 2Y-1.08%
Revenue Next 3Y1.12%
Revenue Next 5Y2.21%
EBIT growth 1Y-6.18%
EBIT growth 3Y-12.41%
EBIT growth 5Y1.92%
EBIT Next Year47.86%
EBIT Next 3Y19.15%
EBIT Next 5Y12.29%
FCF growth 1Y22.3%
FCF growth 3Y-16.86%
FCF growth 5Y22.43%
OCF growth 1Y-1.13%
OCF growth 3Y-12.3%
OCF growth 5Y3.22%