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UPS delivers more value than FedEx

Dav8tor

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Joined
Jan 29, 2002
Posts
131
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8600+
UPS delivers more value than FedEx
Taking Stock
Malcolm
Berko
Dear Mr. Berko: I'm considering the purchase of either United Parcel Service or FedEx Corp. As you know, both companies are in the same business, though FedEx seems to have been around longer.
-- C.P., Kansas City, Mo.
Dear C.P.: Both FedEx Corp. (FDX-$50.27) and United Parcel Service Inc. (UPS-$52.75) are superb companies. However, you should know that UPS has been delivering packages and important documents since 1907 and has been around about 50 years longer than FDX.
The companies are basically in the same business. UPS expects a decline in revenues from $51 billion to $49 billion for 2009 and a pickup in revenues to $53 billion for 2010. The consensus indicates earnings of $2.8 billion in 2009 and $3.4 billion in 2010.
FDX expects a decline in revenues from $37.9 billion 2008 to $37.5 billion in 2009, and an uptick to $38 billion in 2010. The consensus indicates earnings of $1.3 billion for 2009 and $1.4 billion for 2010.
Now, for the brass tacks. Here's why UPS is a better company:
1. Net profit margins for UPS have averaged 8 percent over the past decade -- twice the 4 percent net profit margins of FDX.
2. The UPS 10-year average return on shareholder's equity is about 22 percent, which is twice 10-year average return of 11 percent for FDX.
3. UPS pays a dividend that has tripled in the last decade from 58 cents to $1.80 a share for 2009. FDX pays a dividend of 44 cents.
4. UPS uses 100,000 ground vehicles and 617 airplanes to produce $2.9 billion in net profits. FDX uses 1.4 million ground vehicles plus 677 airplanes to produce $1.3 billion in net income.
5. Each UPS employee brings $6,500 in annual net income to the company's bottom line, while each FDX employee brings $4,500 in annual net income.
6. Investors seem to think UPS is a better company because they ascribe a price-earnings ratio of 15-to-1 to UPS vs. a price-earnings ratio of 11-to-1 to FDX.
Address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at malber@comcast.net.
 

check six

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Oct 10, 2002
Posts
131
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UPS v FDX

I don't get how you came up with the following result:

2. The UPS 10-year average return on shareholder's equity is about 22 percent, which is twice 10-year average return of 11 percent for FDX.

For the last 10 year period, I show FDX up about 50% (42-59) and UPS down about 15-20% (69-54).
 

PURPLEHAZE21

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Dec 12, 2005
Posts
212
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Amazing...a company like FEDEX, who is 35 years old, is giving UPS, a company almost 100 years old, a run for the money....
 

brownie

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Joined
Feb 18, 2005
Posts
198
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10000
That's what happens when you think outside of box in your case the purple box. We're stuck within our brown cubicles and refusing to accept anything different for last 100 yrs and will be for another 100:smash:
 
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