United Parcel Service (UPS) vs. FedEx Corporation (FDX) Head to Head Comparison
FedEx Corporation (NYSE: FDX) and United Parcel Service (NYSE:UPS) are both large-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitabiliy, valuation and institutional ownership.
This table compares FedEx Corporation and United Parcel Service’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Parcel Service||5.68%||417.18%||13.38%|
FedEx Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 1.0%. United Parcel Service pays an annual dividend of $3.32 per share and has a dividend yield of 3.0%. FedEx Corporation pays out 18.1% of its earnings in the form of a dividend. United Parcel Service pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FedEx Corporation has raised its dividend for 7 consecutive years and United Parcel Service has raised its dividend for 7 consecutive years.
Earnings and Valuation
This table compares FedEx Corporation and United Parcel Service’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|FedEx Corporation||$60.32 billion||0.93||$8.28 billion||$11.06||18.93|
|United Parcel Service||$62.92 billion||1.55||$7.85 billion||$4.07||27.40|
FedEx Corporation has higher revenue, but lower earnings than United Parcel Service. FedEx Corporation is trading at a lower price-to-earnings ratio than United Parcel Service, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
FedEx Corporation has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, United Parcel Service has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.
Institutional & Insider Ownership
76.5% of FedEx Corporation shares are held by institutional investors. Comparatively, 53.2% of United Parcel Service shares are held by institutional investors. 8.7% of FedEx Corporation shares are held by company insiders. Comparatively, 0.6% of United Parcel Service shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of recent ratings and price targets for FedEx Corporation and United Parcel Service, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Parcel Service||0||10||4||0||2.29|
FedEx Corporation presently has a consensus target price of $221.88, suggesting a potential upside of 5.98%. United Parcel Service has a consensus target price of $113.42, suggesting a potential upside of 1.70%. Given FedEx Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe FedEx Corporation is more favorable than United Parcel Service.
FedEx Corporation beats United Parcel Service on 9 of the 16 factors compared between the two stocks.
About FedEx Corporation
FedEx Corporation (FedEx) provides a portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. The Company’s segments include FedEx Express, TNT Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers a range of the United States domestic and international shipping services for delivery of packages and freight. TNT Express segment collects, transports and delivers documents, parcels and freight on a day-definite or time-definite basis. The FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services. The FedEx Freight segment offers less-than-truckload (LTL) freight services. The FedEx Services segment provides its other companies with sales, marketing, information technology, communications, customer service and other back-office support.
About United Parcel Service
United Parcel Service, Inc. (UPS) is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. The Company offers a spectrum of the United States domestic guaranteed ground and air package transportation services. The International Package segment includes the small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, the Middle East and Africa. The Supply Chain & Freight segment includes its forwarding and logistics services, truckload freight brokerage, UPS Freight and its financial offerings through UPS Capital. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics and ground freight.
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