UNITED PARCEL SERVICE INC (UPS) Stock Analysis
UNITED PARCEL SERVICE INC (UPS) Stock Analysis
Analysis from 10-Q filed 2025-11-05. Data as of Q4 2025.
Overall Grade: F (Concerning)
UNITED PARCEL SERVICE INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 11.5% | Near cost of capital |
| FCF Margin | 5.4% | Healthy cash flow |
| Debt/Equity | 1.5x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore UNITED PARCEL SERVICE INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: UNITED PARCEL SERVICE INC earns 11.5% ROIC, Top 25% in Transportation
UNITED PARCEL SERVICE INC's trailing-twelve-month ROIC of 11.5% ranks Top 25% in Transportation companies (sector median: 6.7%), driven by NOPAT margin of 6.9% combined with asset turnover of 1.3x. Source: 10-Q filed 2025-11-05.
| Metric | UPS | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.5% | Adequate | Above sector median of 6.7% |
| Return on Equity (ROE) | 35.0% | Excellent | Efficient use of shareholder equity |
| Operating Margin | 8.9% | Adequate | Moderate operational efficiency |
Cash Flow: UNITED PARCEL SERVICE INC generates $4.8B FCF at 5.4% margin, positive NaN/8 quarters
UNITED PARCEL SERVICE INC generated $4.8B in free cash flow (TTM), a 5.4% FCF margin, a margin that ranks Top 50% in Transportation. Operating cash flow exceeds net income by 1.5x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-05.
| Metric | UPS | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 5.4% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $4.8B | Good | Positive cash generation |
| OCF/Net Income | 1.5x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: UNITED PARCEL SERVICE INC at 1.5x leverage
UNITED PARCEL SERVICE INC's debt-to-equity ratio of 1.5x reflects elevated leverage. Total debt of $24.1B offset by $5.9B in cash. Source: 10-Q filed 2025-11-05.
| Metric | UPS | Rating | Context |
|---|---|---|---|
| Debt to Equity | 1.5x | Adequate | Moderate leverage |
| Net Cash Position | $-18.2B | Warning | Net debt position |
Valuation: UNITED PARCEL SERVICE INC trades at 15.1x earnings
UNITED PARCEL SERVICE INC trades at a P/E of 15.1x. Free cash flow yield of 5.7% offers attractive cash returns relative to price.
| Metric | UPS | Rating | Context |
|---|---|---|---|
| P/E Ratio | 15.1x | Adequate | Reasonable valuation |
| EV/Sales | 1.1x | Excellent | Attractive revenue multiple |
| FCF Yield | 5.7% | Good | Attractive cash return |
| Dividend Yield | 6.6% | Good | Meaningful income |
Capital Allocation: UNITED PARCEL SERVICE INC returns 7.8% shareholder yield
UNITED PARCEL SERVICE INC's total shareholder yield is 7.8% (dividends 6.6% + buybacks 1.2%). Source: 10-Q filed 2025-11-05.
| Metric | UPS | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 7.8% | Excellent | Dividend + buyback yield combined |
| Buyback Yield | 1.2% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $6.4B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.5% | Top 25% | 1.7x above |
| Free Cash Flow Margin | 5.4% | Top 50% | 1.4x above |
| Operating Margin | 8.9% | Top 50% | 1.4x above |
| Return on Equity (ROE) | 35.0% | Top 5% | 3.3x above |
| P/E Ratio | 15.1x | N/A | - |
Financial Scorecard
| Metric | UPS | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 11.5% | Adequate | Top 25% of sector (median: 6.7%) |
| Free Cash Flow Margin | 5.4% | Adequate | Top 50% of sector (median: 3.8%) |
| Debt to Equity Ratio | 148.7% | Adequate | Elevated but manageable |
| P/E Ratio (Price-to-Earnings) | 15.1x | Adequate | Fair value |
| Free Cash Flow Yield | 5.7% | Good | Solid cash yield |
Frequently Asked Questions
Q: What is UNITED PARCEL SERVICE INC's Return on Invested Capital (ROIC)?
UNITED PARCEL SERVICE INC (UPS) has a trailing twelve-month Return on Invested Capital (ROIC) of 11.5%. This compares above the sector median of 6.7%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is UNITED PARCEL SERVICE INC's Free Cash Flow Margin?
UNITED PARCEL SERVICE INC (UPS) has a free cash flow margin of 5.4%, generating $4.8 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is UNITED PARCEL SERVICE INC stock overvalued or undervalued?
UNITED PARCEL SERVICE INC (UPS) trades at a P/E ratio of 15.1x, which is above the sector median of N/A. The EV/Sales multiple is 1.1x. Free cash flow yield is 5.7%, which is in line with market averages.
Q: Does UNITED PARCEL SERVICE INC pay a dividend?
UNITED PARCEL SERVICE INC (UPS) currently pays a dividend yield of 6.6%. Including share buybacks, the total shareholder yield is 7.8%. A yield above 4% is attractive for income investors, though sustainability should be verified through payout ratio analysis.
Q: How much debt does UNITED PARCEL SERVICE INC have?
UNITED PARCEL SERVICE INC (UPS) has a debt-to-equity ratio of 1.5x with total debt of $24.1 billion. Net debt position is $18.2 billion.
Q: What is UNITED PARCEL SERVICE INC's revenue and earnings growth?
UNITED PARCEL SERVICE INC (UPS) declined revenue by 2.6% year-over-year. Earnings per share decreased by 3.0% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is UNITED PARCEL SERVICE INC buying back stock?
UNITED PARCEL SERVICE INC (UPS) repurchased $1.0 billion of stock over the trailing twelve months. This represents a buyback yield of 1.2%.
Q: How does UNITED PARCEL SERVICE INC compare to competitors in Transportation?
Compared to other companies in Transportation, UNITED PARCEL SERVICE INC (UPS) shows: ROIC of 11.5% is above the sector median of 6.7% (Top 25%). FCF margin of 5.4% exceeds the sector median of 3.8% (Top 43% of sector). These rankings are based on MetricDuck's analysis of all Transportation companies with available SEC filings.
Q: What warning signs should I watch for with UNITED PARCEL SERVICE INC?
UNITED PARCEL SERVICE INC (UPS) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-11-05. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.