UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:UPS - US9113121068 - Common Stock
107.98 USD
-1.32 (-1.21%)
107.979 USD
0 (0%)
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 on the other hand it scores bad on growth. 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.
- In the past year UPS had a positive cash flow from operations.
- UPS had positive earnings in each of the past 5 years.
- Each year in the past 5 years UPS had a positive operating cash flow.
1.2 Ratios
- UPS has a better Return On Assets (7.71%) than 82.61% of its industry peers.
- UPS has a better Return On Equity (34.77%) than 95.65% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 11.40%, UPS belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
- UPS had an Average Return On Invested Capital over the past 3 years of 15.05%. This 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
- With an excellent Profit Margin value of 6.15%, UPS belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
- UPS's Profit Margin has been stable in the last couple of years.
- The Operating Margin of UPS (9.29%) is better than 91.30% of its industry peers.
- In the last couple of years the Operating Margin of UPS has declined.
- UPS has a Gross Margin of 82.44%. This is amongst the best in the industry. UPS outperforms 100.00% of its industry peers.
- UPS's Gross Margin has been stable in the last couple of years.
| 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
- 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 remains at a similar level compared to 1 year ago.
- The number of shares outstanding for UPS has been reduced compared to 5 years ago.
- The debt/assets ratio for UPS has been reduced compared to a year ago.
2.2 Solvency
- UPS has an Altman-Z score of 3.10. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
- UPS's Altman-Z score of 3.10 is in line compared to the rest of the industry. UPS outperforms 56.52% of its industry peers.
- 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.
- UPS's Debt to FCF ratio of 5.64 is fine compared to the rest of the industry. UPS outperforms 73.91% of its industry peers.
- UPS has a Debt/Equity ratio of 1.51. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.51, UPS is doing worse than 78.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.51 | ||
| Debt/FCF | 5.64 | ||
| Altman-Z | 3.1 |
ROIC/WACC1.47
WACC7.78%
2.3 Liquidity
- A Current Ratio of 1.30 indicates that UPS should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.30, UPS is doing worse than 69.57% of the companies in the same industry.
- UPS has a Quick Ratio of 1.30. This is a normal value and indicates that UPS is financially healthy and should not expect problems in meeting 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.
- The Earnings Per Share has been growing slightly by 0.53% on average over the past years.
- UPS shows a decrease in Revenue. In the last year, the revenue decreased by -1.33%.
- The Revenue has been growing slightly by 4.21% on average over the past years.
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
- UPS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.95% yearly.
- 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-9.62%
EPS Next 2Y-3.4%
EPS Next 3Y1.28%
EPS Next 5Y4.95%
Revenue Next Year-3.34%
Revenue Next 2Y-1.81%
Revenue Next 3Y0.07%
Revenue Next 5Y2.05%
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 14.34, UPS is valued correctly.
- 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's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- With a Price/Forward Earnings ratio of 14.97, 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 is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.34 | ||
| Fwd PE | 14.97 |
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 78.26% of the companies listed 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 | 20.84 | ||
| EV/EBITDA | 9.23 |
4.3 Compensation for Growth
- UPS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)27.28
EPS Next 2Y-3.4%
EPS Next 3Y1.28%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 6.04%, UPS is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 1.13, UPS pays a better dividend. On top of this UPS pays more dividend than 95.65% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, UPS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.04% |
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 their dividend for at least 10 years, which is a reliable track record.
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.
- UPS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP98.06%
EPS Next 2Y-3.4%
EPS Next 3Y1.28%
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 14.34 and the Price/Book (PB) ratio is 5.79.
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 -9.62% in the next year.