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Category: FedEx (FDX) and United Parcel Service (UPS)
Date: 5 July 2020 Stock price of FedEx: $155.48 Stock price of United Parcel Service: $114.36 Battle of the logistics firms stocks. We take a look at FedEx (FDX) and United Parcel Service (UPS) stock's performance over the last couple of years and look at which stock offers the best prospects for future growth based on their current financial position and their latest earnings report.
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Taking all of the above into consideration, the fact that FedEx was loss making during their last quarter while UPS made significant profits, UPS is trading with what looks like a far stronger balance sheet. But UPS is however trading at a far higher Price/Stockholders equity per share ratio while FedEx is within the expected range. All things considered we rate the stock of United Parcel Service (UPS) as the WINNER "
More About FedEx (FDX)
FedEx has grown tremendously since its first night of operations in 1973. Now FedEx serves more than 220 countries and territories and continues to offer new products and services around the globe. FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $69 billion, the company offers integrated business solutions through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 500,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities
Overview of FedEx's latest earnings report
Overview of FedEx's latest earnings report
- Revenue: $17.4 billion (flat compared to $17.4 billion from the same quarter of the previous year)
- Net loss: -$334 million (down from $663 million for the same quarter of the previous year)
- Diluted loss per share: -$1.28 (down from $2.53for the same quarter of the previous year)
- Number of shares in issue: 261 million
- Cash and cash equivalents of FedEx: $4.881 billion (up from $2.39 billion for the same quarter of the previous year)
- Cash and equivalents per share: $18.70
- Cash and equivalents makes up 13.6% of FedEx's current market capital
- Cash and equivalents makes up 6.63% of FedEx's total assets
- Cash and equivalents makes up 13.6% of FedEx's current market capital
- Stockholders equity of FedEx: $18.295 billion
- Stockholders equity per share: $70.09
- FedEx is trading at 2 times its stockholders equity per share. It is trading within the expected range as most firms tend to trade at levels between 2 and 4 times its stated stockholders equity per share.
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
- Cash generated from operations for full fiscal year: $5.097 billion
- Cash generated from operations per share: $19.52
More About United Parcel Service (UPS)
UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. UPS was awarded America’s Best Customer Service company for Shipping and Delivery services by Newsweek magazine; Forbes Most Valuable Brand in Transportation; and top rankings on the JUST 100 list for social responsibility, the Dow Jones Sustainability World Index, and the Harris Poll Reputation Quotient, among other prestigious rankings and awards
Overview of UPS's latest earnings report
Overview of UPS's latest earnings report
- Revenue: $18.035 billion (up by 5.1% compared to $17.16 billion from the same quarter of the previous year)
- Cost and expenses: $16.963 million (up by 7.6% compared to $15.766 billion for the same quarter of the previous year)
- Net income: $965 million (down from $1.11 billion for the same quarter of the previous year)
- Diluted earnings per share: $1.15 (down from $1.39 for the same quarter of the previous year)
- Number of shares in issue: 869 million
- Cash and cash equivalents of UPS: $9.46 billion (up from $5.74 billion for the same quarter of the previous year)
- Cash and equivalents per share: $10.88
- Cash and equivalents makes up 9.5% of UPS' current market capital
- Cash and equivalents makes up 15.5% of UPS's total assets
- Cash and equivalents per share: $10.88
- Stockholders equity of United Parcel Service: $3.313 billion
- Stockholders equity per share: $3.81
- UPS is trading at 30 times its stockholders equity per share. It is trading well outside the expected range as most firms tend to trade at levels between 2 and 4 times its stated stockholders equity per share.
- Stockholders equity per share: $3.81
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
- Cash generated from operations : $2.55 billion
- Cash generated from operations per share: $2.93
FedEx (FDX) vs United Parcel Service (UPS)
The image below shows the stock price performance of FedEx (FDX) and United Parcel Service (UPS) over the last 3 years. Both these firms are active logistics and parcel delivery sector but their stock price trends are totally different. Over the three year period the stock of FedEx declined by -9.5% while the stock of United Parcel Service increased by 13.35% over the same time period. So does the stock of FedEx provide a greater buying opportunity because it has decline over the three year period while UPS increased over the three year period or is there a fundamental financial reason why it has declined while the stock of UPS increased?
So if one had to buy one of these two logistics stocks now which one is the better buy? Does the stock of FedEx provide a greater buying opportunity because it declined over the three year period while the stock of UPS increased?
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following for both stocks:
Based on this metric FedEx offers far more value than UPS Most firms tend to trade at a ratio of between 2 and 4 times. UPS is trading at well above the expected range and FedEx is trading at just inside the expected range. Next up cash as percentage of stock price. Cash per share makes up just over 13.6% of FedEx stock price while UPS' cash makes up 9.5% of their stock price. Total cash as percentage of total assets is as follows. Cash makes up 6.6% of FedEx total assets while UPS' cash makes up around 15.5% of their total assets. So it does look like UPS is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of FedEx
Taking all of the above into consideration, the fact that FedEx was loss making during their last quarter while UPS made significant profits, UPS is trading with what looks like a far stronger balance sheet. But UPS is however trading at a far higher Price/Stockholders equity per share ratio while FedEx is within the expected range. All things considered we rate the stock of United Parcel Service (UPS) as the WINNER
- Price/Stockholders equity per share for FedEx: 2
- Price/Stockholders equity per share for United Parcel Service: 30
Based on this metric FedEx offers far more value than UPS Most firms tend to trade at a ratio of between 2 and 4 times. UPS is trading at well above the expected range and FedEx is trading at just inside the expected range. Next up cash as percentage of stock price. Cash per share makes up just over 13.6% of FedEx stock price while UPS' cash makes up 9.5% of their stock price. Total cash as percentage of total assets is as follows. Cash makes up 6.6% of FedEx total assets while UPS' cash makes up around 15.5% of their total assets. So it does look like UPS is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of FedEx
Taking all of the above into consideration, the fact that FedEx was loss making during their last quarter while UPS made significant profits, UPS is trading with what looks like a far stronger balance sheet. But UPS is however trading at a far higher Price/Stockholders equity per share ratio while FedEx is within the expected range. All things considered we rate the stock of United Parcel Service (UPS) as the WINNER