United Parcel Service, Inc.
United Parcel Service, Inc. Fundamental Analysis
United Parcel Service, Inc. (UPS) shows moderate financial fundamentals with a PE ratio of 16.92, profit margin of 5.94%, and ROE of 33.03%. The company generates $88.3B in annual revenue with weak year-over-year growth of -2.49%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze UPS's fundamental strength across five key dimensions:
Efficiency Score
WeakUPS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentUPS trades at attractive valuation levels.
Growth Score
WeakUPS faces weak or negative growth trends.
Financial Health Score
ModerateUPS shows balanced financial health with some risks.
Profitability Score
ModerateUPS maintains healthy but balanced margins.
Key Financial Metrics
Is UPS Expensive or Cheap?
P/E Ratio
UPS trades at 16.92 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, UPS's PEG of -1.71 indicates potential undervaluation.
Price to Book
The market values United Parcel Service, Inc. at 5.64 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 6.54 times EBITDA. This is generally considered low.
How Well Does UPS Make Money?
Net Profit Margin
For every $100 in sales, United Parcel Service, Inc. keeps $5.94 as profit after all expenses.
Operating Margin
Core operations generate 8.63 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $33.03 in profit for every $100 of shareholder equity.
ROA
United Parcel Service, Inc. generates $7.31 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
United Parcel Service, Inc. generates limited operating cash flow of $8.35B, signaling weaker underlying cash strength.
Free Cash Flow
United Parcel Service, Inc. produces free cash flow of $4.51B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.31 in free cash annually.
FCF Yield
UPS converts 5.13% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.92
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.71
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.64
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.005
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.59
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.21
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.33
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How UPS Stacks Against Its Sector Peers
| Metric | UPS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.92 | 26.34 | Better (Cheaper) |
| ROE | 33.03% | 1277.00% | Weak |
| Net Margin | 5.94% | -41677.00% (disorted) | Weak |
| Debt/Equity | 1.59 | 0.71 | Weak (High Leverage) |
| Current Ratio | 1.21 | 10.10 | Neutral |
| ROA | 7.31% | -1507984.00% (disorted) | Weak |
UPS outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews United Parcel Service, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.20%
Industry Style: Cyclical, Value, Infrastructure
GrowingEPS CAGR
323.69%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
-17.50%
Industry Style: Cyclical, Value, Infrastructure
Declining