United Parcel Service Inc (UPS) stock analysis

P/E above its 5-year median

United Parcel Service's P/E of 21.6 is above its own 5-year median of 15.6.

P/E below the industry

United Parcel Service's P/E of 21.6 is below the Trucking and Courier Services, except Air median of 34.1.

EV/EBITDA above its 5-year median

United Parcel Service's EV/EBITDA of 11.5 is above its 5-year median of 10.6.

P/B above the industry

United Parcel Service's price-to-book of 6.38 is above the Trucking and Courier Services, except Air median of 1.83.

Trading below fair value

The share price of $112.45 is below our fair value estimate of $116.96.

Margin of safety under 20%

The price is 3.9% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -20.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -19.6% over the last twelve months, against a 5-year average of 32.9% a year.

Growing slower than the industry

Revenue grew 2.1% over the last twelve months; the Trucking and Courier Services, except Air median is 7.6%.

Guidance lowered

United Parcel Service lowered its full year 2026 pension contributions outlook on Oct 27, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 28.7% over the last twelve months and averaged 68.9% over five years.

Return on capital over 10%

Return on invested capital was 14.5%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

United Parcel Service's return on equity of 28.7% is above the Trucking and Courier Services, except Air median of 3.4%.

Earnings grew over 5 years

Net income grew 32.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.8% over the last twelve months, against a 5-year average of 9.0%.

Net margin above the industry

United Parcel Service's net margin of 4.8% is above the Trucking and Courier Services, except Air median of 2.1%.

High debt

Debt is 174% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 3753% five years ago to 174%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 35.6% of total debt.

Interest well covered

Operating income covers interest expense 6.0 times.

Short-term assets cover short-term debts

Current assets are 1.24 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.97; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

United Parcel Service paid dividends worth 5.8% of the share price over the last twelve months.

Yield above Treasuries

The 5.8% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; United Parcel Service yields 5.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Not covered by earnings

Dividends take 123% of net income, leaving little room.

Covered by free cash flow

Dividends take 85.3% of free cash flow.