UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:UPS - US9113121068 - Common Stock
111.915 USD
+4.95 (+4.62%)
UPS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 23 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. This makes UPS very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year UPS was profitable.
- 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's Return On Assets of 7.71% is amongst the best of the industry. UPS outperforms 82.61% of its industry peers.
- UPS has a Return On Equity of 34.77%. This is amongst the best in the industry. UPS outperforms 95.65% of its industry peers.
- The Return On Invested Capital of UPS (11.40%) is better than 86.96% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for UPS is above the industry average of 12.36%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.71% | ||
| ROE | 34.77% | ||
| ROIC | 11.4% |
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
- UPS has a Profit Margin of 6.15%. This is amongst the best in the industry. UPS outperforms 91.30% of its industry peers.
- UPS's Profit Margin has been stable in the last couple of years.
- UPS has a better Operating Margin (9.29%) than 91.30% of its industry peers.
- In the last couple of years the Operating Margin of UPS has declined.
- With an excellent Gross Margin value of 82.44%, UPS belongs to the best 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 Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.29% | ||
| PM (TTM) | 6.15% | ||
| GM | 82.44% |
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.
- The number of shares outstanding for UPS has been reduced compared to 5 years ago.
- UPS has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.08 indicates that UPS is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.08, UPS is in line with its industry, outperforming 56.52% of the companies in the same industry.
- UPS has a debt to FCF ratio of 5.64. This is a neutral value as UPS would need 5.64 years to pay back of all of its debts.
- The Debt to FCF ratio of UPS (5.64) is better than 73.91% of its industry peers.
- A Debt/Equity ratio of 1.51 is on the high side and indicates that UPS has dependencies on debt financing.
- UPS has a worse Debt to Equity ratio (1.51) than 78.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.51 | ||
| Debt/FCF | 5.64 | ||
| Altman-Z | 3.08 |
ROIC/WACC1.47
WACC7.75%
2.3 Liquidity
- A Current Ratio of 1.30 indicates that UPS should not have too much problems paying its short term obligations.
- UPS has a Current ratio of 1.30. This is in the lower half of the industry: UPS underperforms 69.57% of its industry peers.
- A Quick Ratio of 1.30 indicates that UPS should not have too much problems paying its short term obligations.
- UPS's Quick ratio of 1.30 is on the low side compared to the rest of the industry. UPS is outperformed by 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 1.07% over the past year.
- UPS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.53% yearly.
- UPS shows a decrease in Revenue. In the last year, the revenue decreased by -1.33%.
- UPS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.21% yearly.
EPS 1Y (TTM)1.07%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%-1.14%
Revenue 1Y (TTM)-1.33%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-3.73%
3.2 Future
- The Earnings Per Share is expected to grow by 4.95% on average over the next years.
- UPS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.05% yearly.
EPS Next Y-9.36%
EPS Next 2Y-3.56%
EPS Next 3Y1.18%
EPS Next 5Y4.95%
Revenue Next Year-3.31%
Revenue Next 2Y-1.8%
Revenue Next 3Y0.15%
Revenue Next 5Y2.05%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 14.86, the valuation of UPS can be described as correct.
- Compared to the rest of the industry, the Price/Earnings ratio of UPS indicates a rather cheap valuation: UPS is cheaper than 82.61% of the companies listed in the same industry.
- UPS is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- UPS is valuated correctly with a Price/Forward Earnings ratio of 15.57.
- 86.96% of the companies in the same industry are more expensive than UPS, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of UPS to the average of the S&P500 Index (25.98), we can say UPS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.86 | ||
| Fwd PE | 15.57 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, UPS is valued a bit cheaper than 78.26% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of UPS indicates a rather cheap valuation: UPS is cheaper than 86.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.6 | ||
| EV/EBITDA | 9.06 |
4.3 Compensation for Growth
- The excellent profitability rating of UPS may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)28.27
EPS Next 2Y-3.56%
EPS Next 3Y1.18%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 6.00%, UPS is a good candidate for dividend investing.
- UPS's Dividend Yield is rather good when compared to the industry average which is at 1.11. 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 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6% |
5.2 History
- The dividend of UPS is nicely growing with an annual growth rate of 11.17%!
- UPS has been paying a dividend for at least 10 years, so it has 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)11.17%
Div Incr Years15
Div Non Decr Years25
5.3 Sustainability
- 98.06% 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.
DP98.06%
EPS Next 2Y-3.56%
EPS Next 3Y1.18%
UNITED PARCEL SERVICE-CL B / UPS FAQ
What is the fundamental rating for UPS stock?
ChartMill assigns a fundamental rating of 6 / 10 to UPS.
What is the valuation status for UPS stock?
ChartMill assigns a valuation rating of 6 / 10 to UNITED PARCEL SERVICE-CL B (UPS). This can be considered as Fairly Valued.
How profitable is UNITED PARCEL SERVICE-CL B (UPS) stock?
UNITED PARCEL SERVICE-CL B (UPS) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for UPS stock?
The Price/Earnings (PE) ratio for UNITED PARCEL SERVICE-CL B (UPS) is 14.86 and the Price/Book (PB) ratio is 6.
What is the expected EPS growth for UNITED PARCEL SERVICE-CL B (UPS) stock?
The Earnings per Share (EPS) of UNITED PARCEL SERVICE-CL B (UPS) is expected to decline by -9.36% in the next year.