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United Parcel Service, Inc. Message Board

  • dudesbag dudesbag Apr 25, 2013 10:08 AM Flag

    if you're an investor deciding on UPS or FDX...

    some factors might be considered. First, FDX relies much more on revenue from air operations which, as customers move to less premium products, is a drag on profits. Their split ground/air express operations must suffer in this environment. In fact, while we just reported a Q1 result that beat EPS by a good margin. FDX reported a $.15 MISS last month- this despite resorting to a cost control (head count reduction amongst other things) strategy. Methinks our integrated model is truly proving superior. BTW, in May FDX expects to report EPS of $1.98 or a penny LESS less than last year. For their irritating full year (ends in May to avoid UPS comps?), they are projected to report $6.06 or $.53 LESS than last year.

    So, could it be that the golden boy Fred Smith has seen his better days? Could it be that our consistent dividend strategy and growth strategy is becoming more appreciated than the old "buy FDX for growth and UPS for value" axiom? We seem to be managing better in a difficult environment that is straining the FDX business model. Now if it can be indicated that the postal service contract will provide little margin growth for FDX we'll be sitting pretty. I must say I was amazed that the topic didn't come up during the earnings call.

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    • Buy FDX or UPS is a nobrainer! FDX has a $50.85 book value with $2.24 billion in debt and $3.37 billion in cash/ and UPS has a $4.88 book value and $12.92 billion in debt. Why would anyone in their right mind buy UPS over FDX even if you think UPS is a little better company the valuations are so compelling that FDX is the clear clear winner!

      Sentiment: Sell

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