United Parcel Service Inc

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UPS : NYSE : Services
$109.31 up 0.12 | 0.11%
Today's Range: 108.68 - 109.55
Avg. Daily Volume: 2704300.0
06/22/17 - 1:20 PM ET

Financial Analysis


UNITED PARCEL SERVICE INC's gross profit margin for the first quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. UNITED PARCEL SERVICE INC has weak liquidity. Currently, the Quick Ratio is 0.89 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 78.22% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)15315.014418.0
EBITDA ($mil)2338.02375.0
EBIT ($mil)1784.01823.0
Net Income ($mil)1158.01131.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)3718.06267.0
Total Assets ($mil)38380.039168.0
Total Debt ($mil)17240.015438.0
Equity ($mil)535.02457.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin15.2716.47
EBITDA Margin15.2616.47
Operating Margin11.6512.64
Sales Turnover1.611.5
Return on Assets9.012.63
Return on Equity646.35201.42
Debt Q1 FY17 Q1 FY16
Current Ratio1.011.25
Debt/Capital0.970.86
Interest Expense109.095.0
Interest Coverage16.3719.19


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)868.0884.0
Div / share0.830.78
EPS1.321.27
Book value / share0.622.78
Institutional Own % n/a n/a
Avg Daily Volume2710581.03097012.0

Valuation


HOLD. The current P/E ratio indicates a discount compared to an average of 31.43 for the Air Freight & Logistics industry and a premium compared to the S&P 500 average of 25.73. For additional comparison, its price-to-book ratio of 178.91 indicates a significant premium versus the S&P 500 average of 3.08 and a significant premium versus the industry average of 80.82. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. The valuation analysis reveals that, UNITED PARCEL SERVICE INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
UPS 28.13 Peers 31.43   UPS 23.40 Peers 26.53

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

UPS is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

UPS is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
UPS 17.15 Peers 18.51   UPS 0.52 Peers 0.42

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

UPS is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

UPS trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
UPS 178.91 Peers 80.82   UPS -28.60 Peers 26.13

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

UPS is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, UPS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
UPS 1.55 Peers 1.58   UPS 5.09 Peers 9.81

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

UPS is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

UPS significantly trails its peers on the basis of sales growth

 

 

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