* Note: Prices are in Million (M) USD.
Description:
United Parcel Service is an American multinational shipping & receiving and supply chain management company founded in 1907.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $6,112 M
Debt : $25,652 M
EBITDA : $11,555 M
Net Debt (Debt - Cash): $19,540 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Industrials
Industry: Integrated shipping & logistics
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 12.74
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $4,254 M
Average Revenue: $65,121 M
Revenue Converted To Free Cash Flow (%): 6.5%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $91,070 M
Revenue 4 Years Ago (2020-12-31): $84,628 M
Last 5 Years Average Revenue Growth: 2%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $856 M
Share Count 5 Years Ago (2020-12-31): $871 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $7.00
Trailing 12-Month Earnings Per Share (EPS): $6.70
Average Earnings Per Share (EPS): $6.85
Dividend Per Share (DPS): $7
Payout Ratio: 95%
Dividend Yield: 8%
Since company Payout Ratio is greater than 50, 1 point assigned.
Since Dividend Yield is greater than 5, 5 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 130.9%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $87
52-Week Low: $84
Threshold Price (15% Above 52-Week Low): $97
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $73,485 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 33 points to above United Parcel Service Inc (UPS) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (18.56)
× EPS ($6.85) = $127.14.
Last 20 Years Avg PE 18.56, Fair Value PE 15, Industry Based PE 15, Growth Based PE 1, RCFC Based PE 15.23, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 18.84. Value-Trades has assined P/E value 18.84. Since an average (Current Year EPS + Next Year EPS) earning per share is $6.85.
The fair value of United Parcel Service Inc (UPS) stock should be (18.84 x $6.85) = $129.05.
