Stock of the Day

October 2, 2023

United Parcel Service (UPS)

$96.93
+$2.97 (+3.2%)
Market Cap: $82.79B

About United Parcel Service

United Parcel Service, Inc., a package delivery company, provides transportation and delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage, and insurance services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery of express letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services comprising guaranteed time-definite express options in Europe, Asia, the Indian sub-continent, the Middle East, Africa, Canada, and Latin America. The company also offers international air and ocean freight forwarding, post-sales, and mail and consulting services. In addition, it provides truckload and customs brokerage services; supply chain solutions to the healthcare and life sciences industries; fulfillment and transportation management services; and integrated supply chain and shipment insurance solutions. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.

United Parcel Service Bull Case

Here are some ways that investors could benefit from investing in United Parcel Service, Inc.:

  • The company recently reported earnings per share of $1.49, exceeding analysts' expectations, which indicates strong financial performance and potential for growth.
  • United Parcel Service, Inc. has a solid return on equity of 39.13%, suggesting effective management and profitability relative to shareholder equity.
  • The current stock price is around $150, reflecting a stable investment opportunity in the transportation sector.
  • With a dividend yield of approximately 6.92%, the company offers attractive returns to investors through regular dividend payments, enhancing overall investment value.
  • Despite a slight year-over-year revenue decline, the company continues to maintain a robust revenue stream of $21.50 billion, showcasing its resilience in the market.

United Parcel Service Bear Case

Investors should be bearish about investing in United Parcel Service, Inc. for these reasons:

  • The company's revenue has decreased by 0.9% compared to the same quarter last year, which may indicate challenges in maintaining growth.
  • With a debt-to-equity ratio of 1.16, the company has a relatively high level of debt compared to its equity, which could pose risks in times of economic downturn.
  • The dividend payout ratio is currently at 95.63%, suggesting that a significant portion of earnings is being distributed as dividends, which may limit reinvestment in the business.
  • Market analysts predict earnings per share of 7.95 for the current fiscal year, which may not meet investor expectations if growth does not accelerate.
  • Institutional ownership stands at 60.26%, which could lead to volatility if large investors decide to sell their stakes, impacting stock performance.

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