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United Parcel Service Inc Class B UPS

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Stock XNYS Rating as of
$135.95 −0.90 (0.66%)
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As of Delayed Price Pre-Open: $135.94 0.00
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Company Report

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UPS: Offloads Coyote Truck Brokerage Division; Price Looks Reasonable

Matthew Young

United Parcel Service has inked an agreement to sell its asset-light truck brokerage division, Coyote Logistics, for roughly $1 billion in cash to logistics firm RXO, which was spun off from XPO in late 2022. The announcement isn't a surprise, as UPS disclosed earlier this year that it was pursuing strategic alternatives for the segment. We had agreed with management's decision to put Coyote up for sale, since the business always felt a bit off purpose for UPS as a unionized global parcel delivery specialist. UPS acquired Coyote in 2015 for around $1.8 billion.

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Price vs Fair Value

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UPS is trading at a 455% premium.
Price
$135.95
Fair Value
$962.00
Uncertainty
Medium
1-Star Price
$451.90
5-Star Price
$346.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Despite near-term normalization, UPS' US ground and express package delivery operations should enjoy positive longer-term tailwinds from e-commerce growth.

Bears

Freight diversions seen last year from the Teamsters' strike threat and lingering sluggish retail restocking will create year-over-year volume growth headwinds into the first half of 2024.

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Trading Information

Previous Close Price
$136.85
Day Range
$135.56–138.10
52-Week Range
$132.90–192.98
Bid/Ask
$135.00 / $135.95
Market Cap
$116.31 Bil
Volume/Avg
77 / 3.7 Mil

Key Statistics

Price/Earnings (Normalized)
16.97
Price/Sales
1.30
Dividend Yield (Trailing)
4.78%
Dividend Yield (Forward)
4.80%
Total Yield
5.85%

Company Profile

As the world's largest parcel delivery company, UPS manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 22 million packages per day to residences and businesses across the globe. UPS' domestic US package operations generate around 64% of total revenue while international package makes up 20%. Air and ocean freight forwarding, truckload brokerage, and contract logistics make up the remainder. UPS is currently pursuing "strategic alternatives" for its truck brokerage unit, Coyote, which it acquired in 2015.
Sector
Industrials
Industry
Integrated Freight & Logistics
Stock Style Box
Large Value
Total Number of Employees
500,000
Website
https://www.ups.com

Competitors

Valuation

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Metric
UPS
FDX
DHL
Price/Earnings (Normalized)
 16.9717.2212.86
Price/Book Value
 6.882.662.02
Price/Sales
 1.300.870.57
Price/Cash Flow
 10.446.465.78
Price/Earnings
UPS
FDX
DHL

Financial Strength

Metric
UPS
FDX
DHL
Quick Ratio
 0.961.170.74
Current Ratio
 1.101.310.95
Interest Coverage
 10.5816.467.22
Quick Ratio
UPS
FDX
DHL

Profitability

Metric
UPS
FDX
DHL
Return on Assets (Normalized)
 9.78%5.74%5.51%
Return on Equity (Normalized)
 36.79%19.12%16.07%
Return on Invested Capital (Normalized)
 16.90%8.22%9.19%
Return on Assets
UPS
FDX
DHL
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Integrated Freight & Logistics Industry Comparables

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
FedEx Corp
FDX
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DPSTF
—Zszgpr$48.8 Bil
 DHL Group ADR
DHLGY
TdzppfrznXyhwtz$48.8 Bil
 Expeditors International of Washington Inc
EXPD
HbtkytpbBqqd$17.1 Bil
 ZTO Express (Cayman) Inc ADR
ZTO
MqtphxnwSgxgfq$17.0 Bil
 JB Hunt Transport Services Inc
JBHT
ShgpnbfFlljtj$16.4 Bil
 C.H. Robinson Worldwide Inc
CHRW
GwgsncwjPxgn$10.2 Bil
 Landstar System Inc
LSTR
TwbrwzmbMdgf$6.6 Bil
 Hub Group Inc Class A
HUBG
YkpcbspgCrcwqg$2.7 Bil

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