FedEx vs UPS

FedEx and UPS are two of the biggest players in the package delivery industry, constantly competing for market share and profitability. Both companies have seen significant growth over the years, benefiting from the rise of e-commerce and the increasing demand for fast and reliable shipping services. Investors are often torn between choosing between the two stocks, as they offer different investment opportunities and potential for growth. In this analysis, we will compare the performance of FedEx and UPS stocks, examining their financials, market trends, and competitive advantages to help investors make informed decisions.

FedEx or UPS?

When comparing FedEx and UPS, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between FedEx and UPS.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. FedEx has a dividend yield of 1.97%, while UPS has a dividend yield of 4.84%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. FedEx reports a 5-year dividend growth of 15.01% year and a payout ratio of 31.63%. On the other hand, UPS reports a 5-year dividend growth of 12.23% year and a payout ratio of 102.40%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with FedEx P/E ratio at 16.32 and UPS's P/E ratio at 21.92. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. FedEx P/B ratio is 2.43 while UPS's P/B ratio is 6.76.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, FedEx has seen a 5-year revenue growth of 0.45%, while UPS's is 0.28%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with FedEx's ROE at 15.00% and UPS's ROE at 29.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $264.00 for FedEx and $133.25 for UPS. Over the past year, FedEx's prices ranged from $224.69 to $313.84, with a yearly change of 39.68%. UPS's prices fluctuated between $123.12 and $163.82, with a yearly change of 33.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.