Critical Contrast: United Parcel Service (UPS) versus Its Competitors

United Parcel Service (NYSE:UPS) is one of 60 public companies in the “Air Freight & Logistics” industry, but how does it compare to its peers? We will compare United Parcel Service to similar companies based on the strength of its institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Dividends

United Parcel Service pays an annual dividend of $6.56 per share and has a dividend yield of 6.3%. United Parcel Service pays out 121.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Air Freight & Logistics” companies pay a dividend yield of 2.6% and pay out 41.4% of their earnings in the form of a dividend. United Parcel Service has raised its dividend for 16 consecutive years.

Insider and Institutional Ownership

60.3% of United Parcel Service shares are owned by institutional investors. Comparatively, 42.6% of shares of all “Air Freight & Logistics” companies are owned by institutional investors. 0.2% of United Parcel Service shares are owned by company insiders. Comparatively, 18.4% of shares of all “Air Freight & Logistics” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares United Parcel Service and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
United Parcel Service	$88.66 billion	$5.57 billion	19.43
United Parcel Service Competitors	$11.98 billion	$591.75 million	14.21

United Parcel Service has higher revenue and earnings than its peers. United Parcel Service is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings for United Parcel Service and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Parcel Service	2	10	8	1	2.38
United Parcel Service Competitors	611	1969	2537	105	2.41

United Parcel Service presently has a consensus target price of $117.41, indicating a potential upside of 12.32%. As a group, “Air Freight & Logistics” companies have a potential upside of 14.16%. Given United Parcel Service’s peers stronger consensus rating and higher possible upside, analysts clearly believe United Parcel Service has less favorable growth aspects than its peers.

Profitability

This table compares United Parcel Service and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Parcel Service	5.08%	37.50%	8.21%
United Parcel Service Competitors	-1,607.12%	-12.56%	-11.60%

Risk and Volatility

United Parcel Service has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, United Parcel Service’s peers have a beta of 0.88, meaning that their average stock price is 12% less volatile than the S&P 500.

Summary

United Parcel Service beats its peers on 10 of the 15 factors compared.

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.