United Parcel Service Inc (NYSE: UPS)

Sector: Industrials Industry: Integrated Freight & Logistics CIK: 0001090727
Market Cap 98.11 Bn
P/B 6.05
P/E 17.61
P/S 1.11
ROIC (Qtr) 13.22
Div Yield % 5.68
Rev 1y % (Qtr) -3.25
Total Debt (Qtr) 28.59 Bn
Debt/Equity (Qtr) 1.76
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About

Investment thesis

Bull case

  • Healthy cash reserves of 5.89B provide 4.29x coverage of short-term debt 1.37B, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 8.45B provides strong 115.75x coverage of stock compensation 73M, indicating sustainable incentive practices.
  • Robust tangible asset base of 63.23B provides 18.46x coverage of working capital 3.42B, indicating strong operational backing.
  • Tangible assets of 63.23B provide robust 8.30x coverage of other current liabilities 7.62B, indicating strong asset backing.
  • Retained earnings of 20.15B represent substantial 1.24x of equity 16.23B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 8.45B barely covers its investment activities of (4.74B), with a coverage ratio of -1.78, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 8.45B provides thin coverage of dividend payments of (5.40B) with a -1.57 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 5.89B provide limited coverage of acquisition spending of (1.27B), which is -4.64x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 8.18B show weak coverage of depreciation charges of 3.75B, with a 2.18 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 3.75B relative to operating cash flow of 8.45B, which is 0.44x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Integrated Freight & Logistics
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FDX Fedex Corp 99.67 Bn 20.28 1.11 37.77 Bn
2 UPS United Parcel Service Inc 98.11 Bn 17.61 1.11 28.59 Bn
3 JBHT Hunt J B Transport Services Inc 28.29 Bn 145.14 7.91 1.60 Bn
4 EXPD Expeditors International Of Washington Inc 22.29 Bn 27.40 2.13 0.56 Bn
5 CHRW C. H. Robinson Worldwide, Inc. 21.34 Bn 36.35 1.31 1.43 Bn
6 ZTO ZTO Express (Cayman) Inc. 20.15 Bn 16.23 3.02 1.74 Bn
7 GXO GXO Logistics, Inc. 7.46 Bn 83.79 0.58 5.50 Bn
8 LSTR Landstar System Inc 5.11 Bn 28.60 1.06 0.13 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.65 1.04
EV to Cash from Ops. EV/CFO 14.27 -0.78
EV to Debt EV to Debt 4.22 -1.98
EV to EBIT EV/EBIT 14.74 10.54
EV to EBITDA EV/EBITDA 10.38 9.04
EV to Free Cash Flow [EV/FCF] EV/FCF 25.30 -2.76
EV to Market Cap EV to Market Cap 1.23 0.62
EV to Revenue EV/Rev 1.36 -0.31
Price to Book Value [P/B] P/B 6.05 4.96
Price to Earnings [P/E] P/E 17.61 15.82
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.03 0.95
Dividend Payout Ratio % Div Payout % (Qtr) 100.00 14.92
Dividend per Basic Share Div per Share (Qtr) 6.56 0.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 116.79 11.81
Interest Coverage Int. cover (Qtr) 8.04 -430.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 5.73 -2,938.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.68 139.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.46 -0.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -1.42 -442.31
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -3.84 -224.47
EBIT Growth (1y) % EBIT 1y % (Qtr) -1.53 -367.92
EBT Growth (1y) % EBT 1y % (Qtr) -3.74 -191.62
EPS Growth (1y) % EPS 1y % (Qtr) -2.96 -974.30
FCF Growth (1y) % FCF 1y % (Qtr) -23.31 -67.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.51 1.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.21 1.29
Cash Payout Ratio Cash Payout (Qtr) 0.44 0.07
Cash Ratio Cash Ratio (Qtr) 0.38 0.97
Current Ratio Curr Ratio (Qtr) 1.22 3.22
Debt to Equity Ratio Debt/Equity (Qtr) 1.76 1.06
Interest Cover Ratio Int Coverage (Qtr) 8.04 -430.42
Times Interest Earned Times Interest Earned (Qtr) 8.04 -430.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.50 17.62
EBIT Margin % EBIT Margin % (Qtr) 9.23 24.68
EBT Margin % EBT Margin % (Qtr) 8.08 18.38
Gross Margin % Gross Margin % (Qtr) 34.20 20.25
Net Profit Margin % Net Margin % (Qtr) 6.30 31.04