Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FDX, UPS over the next 72 hours. (More...)
After my recent article on United Parcel Service (UPS), I decided I would also look at FedEx (FDX). For financial information, I will be using FDX's annual reports. The graphs in this article were all made by me. Please note, I have compared FDX to UPS, but their fiscal years end at different points in time (31st of May for FDX and 31st of December for UPS). Dates shown in the graphs below all refer to fiscal years.
Let's start by looking at FDX's revenue, as compared with UPS
Revenue for FedEx has gone up from $35.5 billion in 2009 to $42.7 billion in 2012, an increase of 20%. In the same period, UPS's revenue went from $45.3 billion to $54.1 billion, increasing 19.5%. There's no clear winner here.
Net income: Growing, but nowhere near UPS
In the 2012 FY, FDX's net income was $2.0 billion, less than half of UPS's $4.4 billion. Of course, this is partially due to the fact that UPS has revenues that are a lot higher. Using net income as a percentage of revenue, we can compensate for this difference.
It's easy to see UPS beats FDX in this category. Out of every dollar in revenue, UPS has just over 8 cents in net income (2012), where FDX has only 4.8 cents/$.
Saving up money for the future: Low but sustainable dividend
Let me teach you something about making money in the market sonny. First, don't look back at past performance..ever! Look ahead, at the future not what's behind you (just like Italian driving.) FDX's 1 year target price plus it's dividend is 4% higher, which in today's economy is above average. UPS' 1 year target price plus it's dividend is 11.5% higher and I believe that's a conserative figure. The clear winner here is UPS. End of story, so go back in you hole and we'll see you next year on Ground Hog day!