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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
United Parcel Service, Inc. (XNYS:UPS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
UPS
Name:
UNITED PARCEL SERVICE, INC. (XNYS:UPS)
Sector:
3.93B
Industry:
Integrated Freight & Logistics
CEO:
Mr. David Abney
Total Employees:
534,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.58% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF UNITED PARCEL SERVICE, INC.(UPS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INTEGRATED FREIGHT & LOGISTICS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
196.05
One Month Price Target:
$197.22
Six Month Price Target :
$203.07
Likely Price in One Year's Time:
Ticker:
$210.08
Likely Trading Range Today Under (Normal Volatility)
$195.54
Price Upper limit ($) :
$196.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$187.81
This week:
$177.62
This month :
$159.18
Other Primary facts
Market Cap:
170.22B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
868.67M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.38%
-8.82%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$234.26
$216.46
$157.84
$175.64
Medium risk (<10%) entry points
Buy Call
Sell Call
$210.67
Buy Put:
Sell Put:
$206.87
$181.38
$185.23
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
UPS
Sharpe Ratio:
4.21%
Comparison:
UPS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 34.27% higher than the industry
& ratio is 84.69% higher than the market/S&P 500 average
Average Returns/Yield of
UPS
Daily returns:
0.10%
Weekly returns:
0.49%
Monthly returns:
1.94%
Yearly returns:
21.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is 9.75% above industry average
Classification:
UPS, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.88
Statistical test of Returns:
UPS has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.09%
Weekly Volatility:
4.68%
Monthly Volatility:
9.37%
Yearly Volatility:
32.45%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.91%
Volatility in last five trading days has been -56.44% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.20%
Weekly VaR:
-9.40%
Monthly VaR:
-18.80%
How Much Can the price of
UPS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-65.14%
This translates to price declining to:
$165.64
This translates to price declining to:
$68.35
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
UPS is a 32.72% riskier investment compared to the market/S&P 500 & is 13.70% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -16.60% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
UPS
Beta in relation to market/S&P 500--1.07
Expected beta in 1 year's time:
0.712
Expected beta in 3 year's time:
1.007
Unlevered (debt free) Beta:
0.495
Beta in relation to Nasdaq (XNAS):
0.636
Beta in relation to all global stocks::
0.589
Beta Comparison & Analysis
Beta of competitors/peers::
0.98
Beta is 8.76% higher than peers
Average Industry Beta:
1.068
Beta is -0.21% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
80.30%
Sustainable growth rate is 191.00% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.128
Alpha is 19.38% above industry average alpha yield
Alpha is 817% higher than market/& is unsustainably high
Analysis of Cost of Capital of
UPS
Equity cost of capital:
0.104
Equity cost of capital is -0.15% below industry mean WACC
Unlevered (without debt) cost of capital:
4.86%
Before-tax cost of debt:
2.72%
After-tax cost of debt:
2.15%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.15%
WACC is -5.28% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$113.69
Revenue growth rate per share of (3Y):
11.03
Annual revenue growth rate is -63.11% below industry average
EPS:
$12.26
Expected Annual growth rate of EPS (3Y):
41.88%
Expected future EPS growth rate is 10.05% higher than the Integrated Freight & Logistics industry
Free cash flow (FCF) per share:
$12.47
Balance sheet equity growth per share: 14.02%
Equity growth rate per share is 122.45% higher than the industry
Debt per share
$26.14
EBITDA per share
$20.11
Valuation Analysis Today of
UPS
P/E Ratio:
15.73
P/E Ratio of Competitors/Peers:
18.91
P/E ratio is -16.82% lower than main peers & is -1.97% lower than the industry
Stock price/value with industry average P/E ratio: $196.67
UPS is -0.32% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $132.28
Present value of the expected future dividends only: $108.79
P/S (Price to Sales ratio):
1.72
Price to sales ratio is 8.62% above the industry mean
P/B (Price to book value ratio):
11.03
Price to free cash flow: 15.72
Price to free cash flow ratio is -82.88% lower than the industry
Net income growth rate (3Y):
168.74%
Net income growth rate is -22.08% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.93%
Dividend yeild: 2.59%
Previous Dividend: $1.52
Previous adjusted dividend: $1.52
Previous Dividend: $5.08
Expected next dividend best case: $1.69
Expected next dividend worst case: $1.35
Average dividend payment (long-term): $1.10
Average dividend increase/decrease (growth rate) % per period: 5.52%
Expected next dividend payment date: 31/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 06/02/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-13--$1.52
2021-11-19--$1.02
2021-05-21--$1.02
2022-02-18--$1.52
2021-08-20--$1.02
2021-02-19--$1.02
Dividend growth rate is -312.73% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
147.31%
Net debt to equity ratio:
85.77%
Debt to assets ratio:
32.39%
Net debt to assets ratio:
18.86%
Debt-to-asset ratio is -83.17% below industry average
Ability to repay debt:
Interest coverage ratio:
25.28
Interest coverage ratio is -30.81% less than industry average
Looking forward:
Debt growth rate:
-8.02%
Annual debt growth is -117% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.08%
Analysis of Key Statistics
Correlation of price movement with the market:
0.605
Statistical significance of correlation:
UPS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.551
Stock price is 9.81% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.551
Correlation of price movement with Nasdaq (^IXIC):
-0.011
Covariance of price movement with the market:
-0.013
Kurtosis
9.33
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.122
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
UPS
Gross Profit Margin Ratio:
85%
Operating Profit Margin Ratio:
13.46%
Operating profit margin is 174.77% higher than the industry
Net Profit Margin Ratio:
85%
Effective Tax Rate:
21.93%
Effective tax rate is -6.23% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
69.80%
Return on equity (ROE) is 116.39% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
15.35%
Return on assets (ROA) is -325.76% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.52
Current ratio is -27.05% below industry average
Cash Conversion Cycle (days):
5.7
Cash conversion cycle is -99.01% below industry average
The remaining useful life of property plant & equipment is: 7.1 years
Stock based compensation to net income ratio:
3.59%
In-depth Efficiency Analysis
Revenue generated per employee:
184.9K
Each employee generates -81% less revenue than industry average revenue per employee
EBITDA generated per employee:
32.7K
Each employee generates -51% less EBITDA than industry average revenue per employee
Profit generated per employee:
20.1K
Each employee generates -25% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
7.4K
Each employee generates -32% less free cash flow than industry average revenue per employee
Assets/Capital per employee
83.4K
Each employee generates -32% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
UPS
UNION PACIFIC CORPORATION (XNYS:UNP)
HONEYWELL INTERNATIONAL INC. (XNAS:HON)
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
CATERPILLAR INC. (XNYS:CAT)
DEERE & COMPANY (XNYS:DE)
GENERAL ELECTRIC COMPANY (XNYS:GE)
3M COMPANY (XNYS:MMM)
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
Canadian National Railway Company (XNYS:CNI)
Current Analyst Ratings
Strong buy�17%
Buy�8%
Hold�79%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
98.76B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
77.68B
21.07B
-
24.37B
24.37B
-
- 16587000.00K
7.78B
-
691.00M
3.00B
17.47B
13.30B
10.76B
13.78B
3.02B
10.76B
Statement of Cash Flow
Date:
Period:
764.00M
Differed Income Tax :
209.00M
Stock Based Compensation :
386.00M
Change in Working Capital :
321.00M
Accounts Receivables:
1.23B
Other Working Capital:
-
Other Non-Cash Items:
138.00M
Net Cash Provided by Operating Activities:
4.48B
Investments in PP&E:
-
Net Acquisitions:
1.00M
Purchases of Investments:
- 68000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
12.21B
337.00M
12.55B
11.20B
-
1.86B
25.60B
37.08B
3.67B
2.47B
21.00M
173.00M
1.11B
44.51B
-
70.11B
7.04B
2.72B
-
-
7.09B
16.84B
22.71B
11.77B
37.84B
-
54.68B
9.00M
17.43B
- 3257000.0K
-
March 31, 2022 at 6:00:00 AM
85.46B
15.42B
70.10B
358.00M
25.43B
13.2B
60.00M
- 565000.00K
- 572000.00K
- 18000.00K
67.00M
- 254000.00K
- 1284000.00K
- 481000.00K
- 1970000.00K
15.00M
1.95B
12.21B
10.26B
4.48B
- 548000.00K
3.93B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
UPS
2023
2024
2025
2026
2027
$211.13
$302.08
$323.71
$346.88
$371.71