Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- UNITED PARCEL SERVICE INC has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED PARCEL SERVICE INC increased its bottom line by earning $3.83 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($4.60 versus $3.83).
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market, UNITED PARCEL SERVICE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Air Freight & Logistics industry average. The net income increased by 2.2% when compared to the same quarter one year prior, going from $1,092.00 million to $1,116.00 million.
United Parcel Service, Inc., a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. The company has a P/E ratio of 19.1, above the average transportation industry P/E ratio of 18.7 and above the S&P 500 P/E ratio of 17.7. United Parcel Service Inc (UPS) Class B has a market cap of $55.04 billion and is part of the
industry. Shares are up 3.4% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.