UNITED PARCEL SERVICE-CL B (UPS)
US9113121068 - Common Stock
Overall UPS gets a fundamental rating of 6 out of 10. We evaluated UPS against 17 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 not valued too expensively and it also shows a decent growth rate. 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
UPS had positive earnings in the past year.
UPS had a positive operating cash flow in the past year.
In the past 5 years UPS has always been profitable.
UPS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of UPS (8.76%) is better than 88.24% of its industry peers.
Looking at the Return On Equity, with a value of 35.05%, UPS belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
UPS's Return On Invested Capital of 12.11% is amongst the best of the industry. UPS outperforms 88.24% of its industry peers.
UPS had an Average Return On Invested Capital over the past 3 years of 17.34%. This is significantly above the industry average of 7.79%.
The 3 year average ROIC (17.34%) for UPS is well above the current ROIC(12.11%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.76% | ||
| ROE | 35.05% | ||
| ROIC | 12.11% |
ROA(3y)14.76%
ROA(5y)10.82%
ROE(3y)62.52%
ROE(5y)105.58%
ROIC(3y)17.34%
ROIC(5y)15.98%
1.3 Margins
The Profit Margin of UPS (6.60%) is better than 82.35% of its industry peers.
UPS's Profit Margin has improved in the last couple of years.
UPS's Operating Margin of 9.15% is fine compared to the rest of the industry. UPS outperforms 76.47% of its industry peers.
In the last couple of years the Operating Margin of UPS has remained more or less at the same level.
UPS has a Gross Margin of 80.03%. 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 | 9.15% | ||
| PM (TTM) | 6.6% | ||
| GM | 80.03% |
OM growth 3Y0.18%
OM growth 5Y0.56%
PM growth 3Y66.88%
PM growth 5Y2.04%
GM growth 3Y0.53%
GM growth 5Y0.81%
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 has been reduced compared to 1 year ago.
Compared to 5 years ago, UPS has less shares outstanding
The debt/assets ratio for UPS is higher compared to a year ago.
2.2 Solvency
UPS has an Altman-Z score of 3.67. This indicates that UPS is financially healthy and has little risk of bankruptcy at the moment.
UPS has a Altman-Z score of 3.67. This is in the better half of the industry: UPS outperforms 64.71% of its industry peers.
The Debt to FCF ratio of UPS is 3.57, which is a good value as it means it would take UPS, 3.57 years of fcf income to pay off all of its debts.
UPS has a Debt to FCF ratio of 3.57. This is in the better half of the industry: UPS outperforms 64.71% of its industry peers.
A Debt/Equity ratio of 1.11 is on the high side and indicates that UPS has dependencies on debt financing.
UPS's Debt to Equity ratio of 1.11 is on the low side compared to the rest of the industry. UPS is outperformed by 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 3.67 |
ROIC/WACC1.44
WACC8.39%
2.3 Liquidity
A Current Ratio of 1.10 indicates that UPS should not have too much problems paying its short term obligations.
UPS has a worse Current ratio (1.10) than 64.71% of its industry peers.
A Quick Ratio of 1.04 indicates that UPS should not have too much problems paying its short term obligations.
UPS has a Quick ratio of 1.04. This is in the lower half of the industry: UPS underperforms 64.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
UPS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -33.80%.
Measured over the past 5 years, UPS shows a small growth in Earnings Per Share. The EPS has been growing by 3.90% on average per year.
Looking at the last year, UPS shows a decrease in Revenue. The Revenue has decreased by -9.25% in the last year.
Measured over the past years, UPS shows a small growth in Revenue. The Revenue has been growing by 4.83% on average per year.
EPS 1Y (TTM)-33.8%
EPS 3Y2.22%
EPS 5Y3.9%
EPS growth Q2Q-35%
Revenue 1Y (TTM)-9.25%
Revenue growth 3Y2.43%
Revenue growth 5Y4.83%
Revenue growth Q2Q-5.32%
3.2 Future
The Earnings Per Share is expected to grow by 12.36% on average over the next years. This is quite good.
UPS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.02% yearly.
EPS Next Y-6.09%
EPS Next 2Y4.99%
EPS Next 3Y8.87%
EPS Next 5Y12.36%
Revenue Next Year1.79%
Revenue Next 2Y3.32%
Revenue Next 3Y4.31%
Revenue Next 5Y5.02%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.55, the valuation of UPS can be described as rather expensive.
UPS's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 25.02, UPS is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.35, which indicates a correct valuation of UPS.
UPS's Price/Forward Earnings ratio is rather cheap when compared to the industry. UPS is cheaper than 82.35% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.32. UPS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.55 | ||
| Fwd PE | 15.35 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as UPS.
UPS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.58 | ||
| EV/EBITDA | 12.13 |
4.3 Compensation for Growth
UPS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.75
EPS Next 2Y4.99%
EPS Next 3Y8.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.42%, UPS is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.76, UPS pays a better dividend. On top of this UPS pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, UPS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.42% |
5.2 History
On average, the dividend of UPS grows each year by 12.35%, 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)12.35%
Div Incr Years14
Div Non Decr Years19
5.3 Sustainability
UPS pays out 90.65% of its income as dividend. This is not a sustainable payout ratio.
UPS's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP90.65%
EPS Next 2Y4.99%
EPS Next 3Y8.87%
UNITED PARCEL SERVICE-CL B
NYSE:UPS (4/29/2024, 6:00:00 PM)
After market: 148.55 0 (0%)148.55
+0.96 (+0.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryAir Freight & Logistics
Earnings (Last)
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Market Cap126.73B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.42% |
Dividend Growth(5Y)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.55 | ||
| Fwd PE | 15.35 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
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EPS(NY)
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OCF(TTM)
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SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)4.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.76% | ||
| ROE | 35.05% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.15% | ||
| PM (TTM) | 6.6% | ||
| GM | 80.03% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
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ROICexc(3y)
ROICexc(5y)
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ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
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Profit Quality(3y)
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Growth
EPS 1Y (TTM)-33.8%
EPS 3Y2.22%
EPS 5Y
EPS growth Q2Q
EPS Next Y-6.09%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-9.25%
Revenue growth 3Y2.43%
Revenue growth 5Y
Revenue growth Q2Q
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Revenue Next 3Y
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