United Parcel Service Inc

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UPS : NYSE : Services
$112.92 -1.84 | -1.6%
Today's Range: 112.905 - 114.81
Avg. Daily Volume: 2581500.0
08/17/17 - 4:04 PM ET

Financial Analysis


UNITED PARCEL SERVICE INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. UNITED PARCEL SERVICE INC has average liquidity. Currently, the Quick Ratio is 1.01 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 52.62% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)15750.014629.0
EBITDA ($mil)2778.02593.0
EBIT ($mil)2216.02038.0
Net Income ($mil)1384.01269.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)4604.05672.0
Total Assets ($mil)39724.038339.0
Total Debt ($mil)18074.014366.0
Equity ($mil)1244.02626.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin17.6417.73
EBITDA Margin17.6317.72
Operating Margin14.0713.93
Sales Turnover1.581.55
Return on Assets8.9913.01
Return on Equity287.21189.94
Debt Q2 FY17 Q2 FY16
Current Ratio1.121.32
Debt/Capital0.940.85
Interest Expense119.097.0
Interest Coverage18.6221.01


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)865.0879.0
Div / share0.830.78
EPS1.581.43
Book value / share1.442.99
Institutional Own % n/a n/a
Avg Daily Volume2595846.02893263.0

Valuation


BUY. UNITED PARCEL SERVICE INC's P/E ratio indicates a premium compared to an average of 25.78 for the Air Freight & Logistics industry and a premium compared to the S&P 500 average of 24.31. For additional comparison, its price-to-book ratio of 77.13 indicates a significant premium versus the S&P 500 average of 3.03 and a significant premium versus the industry average of 36.67. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. After reviewing these and other key valuation criteria, UNITED PARCEL SERVICE INC proves to trade at a premium 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 27.25 Peers 25.78   UPS 21.54 Peers 25.61

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

UPS is trading at a valuation on par with 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 17.17 Peers 17.53   UPS 0.49 Peers 0.56

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.

 

Discount. 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 discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
UPS 77.13 Peers 36.67   UPS -26.93 Peers 17.14

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 1.52 Peers 1.53   UPS 6.04 Peers 11.16

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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