UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
NYSE:UPS - US9113121068 - Common Stock
84.65 USD
+0.8 (+0.95%)
84.62 USD
-0.03 (-0.04%)
We assign a fundamental rating of 6 out of 10 to UPS. UPS was compared to 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 correct valuation and a medium growth rate. Finally 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.
Each year in the past 5 years UPS had a positive operating cash flow.
1.2 Ratios
UPS's Return On Assets of 8.08% is amongst the best of the industry. UPS outperforms 82.61% of its industry peers.
UPS has a Return On Equity of 36.38%. This is amongst the best in the industry. UPS outperforms 91.30% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.69%, UPS belongs to the top of the industry, outperforming 86.96% 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 12.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.08% | ||
| ROE | 36.38% | ||
| ROIC | 11.69% |
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 better Profit Margin (6.34%) than 86.96% of its industry peers.
In the last couple of years the Profit Margin of UPS has remained more or less at the same level.
With an excellent Operating Margin value of 9.41%, UPS belongs to the best of the industry, outperforming 86.96% 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 81.60%. 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 | 9.41% | ||
| PM (TTM) | 6.34% | ||
| GM | 81.6% |
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
UPS has a better debt/assets ratio than last year.
2.2 Solvency
UPS has an Altman-Z score of 2.91. This is not the best score and indicates that UPS is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.91, UPS perfoms like the industry average, outperforming 56.52% of the companies in the same industry.
UPS has a debt to FCF ratio of 6.97. This is a slightly negative value and a sign of low solvency as UPS would need 6.97 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 6.97, UPS is doing good in the industry, outperforming 69.57% of the companies in the same industry.
A Debt/Equity ratio of 1.51 is on the high side and indicates that UPS has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.51, UPS is doing worse than 69.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.51 | ||
| Debt/FCF | 6.97 | ||
| Altman-Z | 2.91 |
ROIC/WACC1.59
WACC7.37%
2.3 Liquidity
A Current Ratio of 1.32 indicates that UPS should not have too much problems paying its short term obligations.
The Current ratio of UPS (1.32) is comparable to the rest of the industry.
A Quick Ratio of 1.32 indicates that UPS should not have too much problems paying its short term obligations.
UPS's Quick ratio of 1.32 is in line compared to the rest of the industry. UPS outperforms 52.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
UPS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.99%.
UPS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.53% yearly.
Looking at the last year, UPS shows a small growth in Revenue. The Revenue has grown by 0.91% in the last year.
The Revenue has been growing slightly by 4.21% on average over the past years.
EPS 1Y (TTM)3.99%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%-13.41%
Revenue 1Y (TTM)0.91%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-2.74%
3.2 Future
UPS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.93% yearly.
Based on estimates for the next years, UPS will show a small growth in Revenue. The Revenue will grow by 2.33% on average per year.
EPS Next Y-14.73%
EPS Next 2Y-2.51%
EPS Next 3Y1.83%
EPS Next 5Y6.93%
Revenue Next Year-3.99%
Revenue Next 2Y-1.85%
Revenue Next 3Y-0.03%
Revenue Next 5Y2.33%
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
With a Price/Earnings ratio of 11.21, the valuation of UPS can be described as very reasonable.
Based on the Price/Earnings ratio, UPS is valued cheaply inside the industry as 86.96% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.44, UPS is valued rather cheaply.
A Price/Forward Earnings ratio of 11.52 indicates a reasonable valuation of UPS.
Based on the Price/Forward Earnings ratio, UPS is valued cheaper than 91.30% of the companies in the same industry.
UPS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.21 | ||
| Fwd PE | 11.52 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of UPS indicates a somewhat cheap valuation: UPS is cheaper than 73.91% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, UPS is valued a bit cheaper than the industry average as 78.26% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.22 | ||
| EV/EBITDA | 7.35 |
4.3 Compensation for Growth
UPS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)21.33
EPS Next 2Y-2.51%
EPS Next 3Y1.83%
5. Dividend
5.1 Amount
UPS has a Yearly Dividend Yield of 7.77%, which is a nice return.
Compared to an average industry Dividend Yield of 3.80, UPS pays a better dividend. On top of this UPS pays more dividend than 95.65% 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 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.77% |
5.2 History
On average, the dividend of UPS grows each year by 11.17%, which is quite nice.
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
94.15% 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.
DP94.15%
EPS Next 2Y-2.51%
EPS Next 3Y1.83%
84.65
+0.8 (+0.95%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)
Earnings (Next)
Inst Owners70.62%
Inst Owner Change-1.26%
Ins Owners0%
Ins Owner Change1.07%
Market Cap71.75B
Analysts73.33
Price Target107.4 (26.88%)
Short Float %2.69%
Short Ratio2.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.77% |
Yearly Dividend6.33
Dividend Growth(5Y)11.17%
DP94.15%
Div Incr Years15
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.6%
Min EPS beat(2)-1.66%
Max EPS beat(2)6.85%
EPS beat(4)3
Avg EPS beat(4)4.98%
Min EPS beat(4)-1.66%
Max EPS beat(4)7.57%
EPS beat(8)5
Avg EPS beat(8)2.56%
EPS beat(12)7
Avg EPS beat(12)1.99%
EPS beat(16)11
Avg EPS beat(16)3.24%
Revenue beat(2)2
Avg Revenue beat(2)1.04%
Min Revenue beat(2)0.72%
Max Revenue beat(2)1.36%
Revenue beat(4)2
Avg Revenue beat(4)0.03%
Min Revenue beat(4)-1.45%
Max Revenue beat(4)1.36%
Revenue beat(8)2
Avg Revenue beat(8)-1.25%
Revenue beat(12)2
Avg Revenue beat(12)-1.93%
Revenue beat(16)5
Avg Revenue beat(16)-1.17%
PT rev (1m)-0.74%
PT rev (3m)-7.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-27.72%
EPS NY rev (1m)-6.48%
EPS NY rev (3m)-7.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.63%
Revenue NY rev (1m)0.48%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.21 | ||
| Fwd PE | 11.52 | ||
| P/S | 0.79 | ||
| P/FCF | 20.22 | ||
| P/OCF | 9.58 | ||
| P/B | 4.56 | ||
| P/tB | 9.46 | ||
| EV/EBITDA | 7.35 |
EPS(TTM)7.55
EY8.92%
EPS(NY)7.35
Fwd EY8.68%
FCF(TTM)4.19
FCFY4.95%
OCF(TTM)8.84
OCFY10.44%
SpS106.56
BVpS18.58
TBVpS8.95
PEG (NY)N/A
PEG (5Y)21.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.08% | ||
| ROE | 36.38% | ||
| ROCE | 14.99% | ||
| ROIC | 11.69% | ||
| ROICexc | 13.15% | ||
| ROICexgc | 15.69% | ||
| OM | 9.41% | ||
| PM (TTM) | 6.34% | ||
| GM | 81.6% | ||
| FCFM | 3.93% |
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 Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.51 | ||
| Debt/FCF | 6.97 | ||
| Debt/EBITDA | 1.96 | ||
| Cap/Depr | 107.3% | ||
| Cap/Sales | 4.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 61.54% | ||
| Profit Quality | 61.94% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 2.91 |
F-Score7
WACC7.37%
ROIC/WACC1.59
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)3.99%
EPS 3Y-13.95%
EPS 5Y0.53%
EPS Q2Q%-13.41%
EPS Next Y-14.73%
EPS Next 2Y-2.51%
EPS Next 3Y1.83%
EPS Next 5Y6.93%
Revenue 1Y (TTM)0.91%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-2.74%
Revenue Next Year-3.99%
Revenue Next 2Y-1.85%
Revenue Next 3Y-0.03%
Revenue Next 5Y2.33%
EBIT growth 1Y14.45%
EBIT growth 3Y-12.41%
EBIT growth 5Y1.92%
EBIT Next Year32.62%
EBIT Next 3Y15.39%
EBIT Next 5Y11.63%
FCF growth 1Y-42.79%
FCF growth 3Y-16.86%
FCF growth 5Y22.43%
OCF growth 1Y-34.34%
OCF growth 3Y-12.3%
OCF growth 5Y3.22%