UNITED PARCEL SERVICE-CL B (UPS) Stock Fundamental Analysis
NYSE:UPS - New York Stock Exchange, Inc. - US9113121068 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to UPS. UPS was compared to 22 industry peers in the Air Freight & Logistics industry. While UPS has a great profitability rating, 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. This makes UPS very considerable 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.
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
The Return On Assets of UPS (8.55%) is better than 81.82% of its industry peers.
The Return On Equity of UPS (37.39%) is better than 95.45% of its industry peers.
The Return On Invested Capital of UPS (12.73%) is better than 81.82% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for UPS is above the industry average of 12.73%.
| 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.
With an excellent Operating Margin value of 9.48%, UPS belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
UPS's Operating Margin has declined in the last couple of years.
UPS has a better Gross Margin (80.82%) than 100.00% of its industry peers.
UPS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.48% | ||
| 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.
The number of shares outstanding for UPS remains at a similar level compared to 1 year ago.
Compared to 5 years ago, UPS has less shares outstanding
Compared to 1 year ago, UPS has an improved debt to assets ratio.
2.2 Solvency
UPS has an Altman-Z score of 3.15. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of UPS (3.15) is comparable to the rest of the industry.
UPS has a debt to FCF ratio of 3.98. This is a good value and a sign of high solvency as UPS would need 3.98 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.98, UPS is doing good in the industry, outperforming 72.73% of the companies in the same industry.
A Debt/Equity ratio of 1.25 is on the high side and indicates that UPS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.25, UPS is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 3.98 | ||
| Altman-Z | 3.15 |
ROIC/WACC1.64
WACC7.74%
2.3 Liquidity
UPS has a Current 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.
With a Current ratio value of 1.09, UPS is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
A Quick Ratio of 1.09 indicates that UPS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.09, UPS is doing worse than 68.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The earnings per share for UPS have decreased by -2.75% in the last 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 small growth in Revenue. In the last year, the Revenue has grown by 1.30%.
Measured over the past years, UPS shows a small growth in Revenue. The Revenue has been growing by 4.21% on average per year.
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 7.12% yearly.
Based on estimates for the next years, UPS will show a small growth in Revenue. The Revenue will grow by 2.35% on average per year.
EPS Next Y-8.01%
EPS Next 2Y2.08%
EPS Next 3Y4.64%
EPS Next 5Y7.12%
Revenue Next Year-4.28%
Revenue Next 2Y-1.77%
Revenue Next 3Y0.14%
Revenue Next 5Y2.35%
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
UPS is valuated correctly with a Price/Earnings ratio of 12.96.
Based on the Price/Earnings ratio, UPS is valued a bit cheaper than 77.27% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.15. UPS is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 12.53 indicates a correct valuation of UPS.
Based on the Price/Forward Earnings ratio, UPS is valued cheaply inside the industry as 86.36% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.60. UPS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 12.53 |
4.2 Price Multiples
72.73% of the companies in the same industry are more expensive than UPS, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, UPS is valued cheaply inside the industry as 86.36% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.91 | ||
| EV/EBITDA | 8.31 |
4.3 Compensation for Growth
UPS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)24.65
EPS Next 2Y2.08%
EPS Next 3Y4.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.52%, UPS is a good candidate for dividend investing.
UPS's Dividend Yield is rather good when compared to the industry average which is at 3.94. UPS pays more dividend than 95.45% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, UPS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.52% |
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
92.20% 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.
DP92.2%
EPS Next 2Y2.08%
EPS Next 3Y4.64%
100.94
-0.24 (-0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)
Earnings (Next)
Inst Owners70.46%
Inst Owner Change-1.33%
Ins Owners0%
Ins Owner Change2.17%
Market Cap85.48B
Analysts75
Price Target116.47 (15.39%)
Short Float %2.27%
Short Ratio2.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.52% |
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)-0.69%
PT rev (3m)-13.32%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-14.84%
EPS NY rev (1m)0.13%
EPS NY rev (3m)-10.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.09%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 12.53 | ||
| P/S | 0.94 | ||
| P/FCF | 15.91 | ||
| P/OCF | 9.37 | ||
| P/B | 5.46 | ||
| P/tB | 11.15 | ||
| EV/EBITDA | 8.31 |
EPS(TTM)7.79
EY7.72%
EPS(NY)8.06
Fwd EY7.98%
FCF(TTM)6.35
FCFY6.29%
OCF(TTM)10.77
OCFY10.67%
SpS107.36
BVpS18.49
TBVpS9.06
PEG (NY)N/A
PEG (5Y)24.65
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 | 3.15 |
F-Score6
WACC7.74%
ROIC/WACC1.64
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-8.01%
EPS Next 2Y2.08%
EPS Next 3Y4.64%
EPS Next 5Y7.12%
Revenue 1Y (TTM)1.3%
Revenue growth 3Y-2.18%
Revenue growth 5Y4.21%
Sales Q2Q%-0.74%
Revenue Next Year-4.28%
Revenue Next 2Y-1.77%
Revenue Next 3Y0.14%
Revenue Next 5Y2.35%
EBIT growth 1Y4.35%
EBIT growth 3Y-12.41%
EBIT growth 5Y1.92%
EBIT Next Year38.11%
EBIT Next 3Y17.41%
EBIT Next 5Y11.9%
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%