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.