UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
NYSE:UPS - New York Stock Exchange, Inc. - US9113121068 - Common Stock - Currency: USD
Overall UPS gets a fundamental rating of 6 out of 10. We evaluated UPS against 22 industry peers in the Air Freight & Logistics industry. UPS scores excellent on profitability, but there are some minor concerns on its financial health. UPS is valued correctly, but it does not seem to be growing. Finally UPS also has an excellent dividend rating. These ratings could make UPS a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year UPS was profitable.
In the past year UPS had a positive cash flow from operations.
Each year in the past 5 years UPS has been profitable.
In the past 5 years UPS always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.55%, UPS belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
UPS has a better Return On Equity (37.39%) than 95.45% of its industry peers.
With an excellent Return On Invested Capital value of 12.73%, UPS belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for UPS is above the industry average of 11.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 37.39% | ||
| ROIC | 12.73% |
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
Looking at the Profit Margin, with a value of 6.44%, UPS belongs to the top of the industry, outperforming 86.36% 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.
UPS's Operating Margin of 9.48% is amongst the best of the industry. UPS outperforms 86.36% of its industry peers.
In the last couple of years the Operating Margin of UPS has declined.
UPS has a better Gross Margin (80.82%) than 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 | 9.48% | ||
| PM (TTM) | 6.44% | ||
| GM | 80.82% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so UPS 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 3.12. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
UPS has a Altman-Z score of 3.12. This is in the better half of the industry: UPS outperforms 63.64% of its industry peers.
The Debt to FCF ratio of UPS is 3.98, which is a good value as it means it would take UPS, 3.98 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of UPS (3.98) is better than 72.73% of its industry peers.
UPS has a Debt/Equity ratio of 1.25. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of UPS (1.25) is worse than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 3.98 | ||
| Altman-Z | 3.12 |
ROIC/WACC1.62
WACC7.84%
2.3 Liquidity
A Current Ratio of 1.09 indicates that UPS should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.09, UPS is doing worse than 63.64% of the companies in the same industry.
UPS has a Quick Ratio of 1.09. 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 (1.09) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
UPS shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.75%.
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 1.30%.
The Revenue has been growing slightly by 4.21% on average over the past years.
EPS 1Y (TTM)-2.75%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%4.2%
Revenue 1Y (TTM)1.3%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-0.74%
3.2 Future
UPS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.03% yearly.
UPS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.21% yearly.
EPS Next Y-8.13%
EPS Next 2Y2.08%
EPS Next 3Y4.69%
EPS Next 5Y5.03%
Revenue Next Year-4.26%
Revenue Next 2Y-1.76%
Revenue Next 3Y0.17%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.52, the valuation of UPS can be described as correct.
Based on the Price/Earnings ratio, UPS is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
UPS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.60.
Based on the Price/Forward Earnings ratio of 12.11, the valuation of UPS can be described as correct.
UPS's Price/Forward Earnings ratio is rather cheap when compared to the industry. UPS is cheaper than 86.36% of the companies in the same industry.
UPS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.52 | ||
| Fwd PE | 12.11 |
4.2 Price Multiples
UPS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. UPS is cheaper than 72.73% of the companies in the same industry.
UPS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. UPS is cheaper than 95.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.38 | ||
| EV/EBITDA | 8.06 |
4.3 Compensation for Growth
The excellent profitability rating of UPS may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)23.82
EPS Next 2Y2.08%
EPS Next 3Y4.69%
5. Dividend
5.1 Amount
UPS has a Yearly Dividend Yield of 6.54%, which is a nice return.
Compared to an average industry Dividend Yield of 3.89, UPS pays a better dividend. On top of this UPS pays more dividend than 95.45% of the companies listed in the same industry.
UPS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.54% |
5.2 History
The dividend of UPS is nicely growing with an annual growth rate of 11.18%!
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)11.18%
Div Incr Years15
Div Non Decr Years25
5.3 Sustainability
UPS pays out 92.20% of its income as dividend. 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.
DP92.2%
EPS Next 2Y2.08%
EPS Next 3Y4.69%
97.55
-1.56 (-1.57%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)
Earnings (Next)
Inst Owners72.29%
Inst Owner Change-1.37%
Ins Owners0%
Ins Owner Change0.96%
Market Cap82.68B
Analysts75.56
Price Target117.27 (20.22%)
Short Float %2.23%
Short Ratio2.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.54% |
Yearly Dividend6.33
Dividend Growth(5Y)11.18%
DP92.2%
Div Incr Years15
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.21%
Min EPS beat(2)6.85%
Max EPS beat(2)7.57%
EPS beat(4)3
Avg EPS beat(4)2.65%
Min EPS beat(4)-10.96%
Max EPS beat(4)7.57%
EPS beat(8)6
Avg EPS beat(8)2.87%
EPS beat(12)8
Avg EPS beat(12)2.39%
EPS beat(16)12
Avg EPS beat(16)3.8%
Revenue beat(2)1
Avg Revenue beat(2)-0.04%
Min Revenue beat(2)-1.45%
Max Revenue beat(2)1.36%
Revenue beat(4)1
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-2.62%
Max Revenue beat(4)1.36%
Revenue beat(8)1
Avg Revenue beat(8)-2.03%
Revenue beat(12)1
Avg Revenue beat(12)-2.02%
Revenue beat(16)4
Avg Revenue beat(16)-1.23%
PT rev (1m)-11.99%
PT rev (3m)-22.52%
EPS NQ rev (1m)-10.91%
EPS NQ rev (3m)-15.36%
EPS NY rev (1m)-7.87%
EPS NY rev (3m)-10.7%
Revenue NQ rev (1m)-1.37%
Revenue NQ rev (3m)-2.14%
Revenue NY rev (1m)-0.85%
Revenue NY rev (3m)-2.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.52 | ||
| Fwd PE | 12.11 | ||
| P/S | 0.91 | ||
| P/FCF | 15.38 | ||
| P/OCF | 9.06 | ||
| P/B | 5.28 | ||
| P/tB | 10.78 | ||
| EV/EBITDA | 8.06 |
EPS(TTM)7.79
EY7.99%
EPS(NY)8.06
Fwd EY8.26%
FCF(TTM)6.34
FCFY6.5%
OCF(TTM)10.77
OCFY11.04%
SpS107.26
BVpS18.48
TBVpS9.05
PEG (NY)N/A
PEG (5Y)23.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.55% | ||
| ROE | 37.39% | ||
| ROCE | 16.32% | ||
| ROIC | 12.73% | ||
| ROICexc | 14.08% | ||
| ROICexgc | 16.91% | ||
| OM | 9.48% | ||
| PM (TTM) | 6.44% | ||
| GM | 80.82% | ||
| FCFM | 5.91% |
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-Score6
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 3.98 | ||
| Debt/EBITDA | 1.59 | ||
| Cap/Depr | 103.51% | ||
| Cap/Sales | 4.12% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.52% | ||
| Profit Quality | 91.77% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 3.12 |
F-Score6
WACC7.84%
ROIC/WACC1.62
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)-2.75%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%4.2%
EPS Next Y-8.13%
EPS Next 2Y2.08%
EPS Next 3Y4.69%
EPS Next 5Y5.03%
Revenue 1Y (TTM)1.3%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-0.74%
Revenue Next Year-4.26%
Revenue Next 2Y-1.76%
Revenue Next 3Y0.17%
Revenue Next 5Y2.21%
EBIT growth 1Y4.35%
EBIT growth 3Y-12.41%
EBIT growth 5Y1.92%
EBIT Next Year47.86%
EBIT Next 3Y19.15%
EBIT Next 5Y12.29%
FCF growth 1Y-24.85%
FCF growth 3Y-16.86%
FCF growth 5Y22.43%
OCF growth 1Y-23.85%
OCF growth 3Y-12.3%
OCF growth 5Y3.22%