United Parcel Service, Inc. is a good play on the turbulent stock market today

​​Here's why United Parcel Service, Inc. is a golden investment amid the ongoing tech sell-off. The stock market has been a circus show in recent history, due to record-high inflation levels, the Fed's decision to raise interest rates in response, and lingering concerns in connection to the war between Russia and Ukraine. Even big tech has struggled, with premier companies posting weaker-than-anticipated financial reports in recent quarters. The panic has sent investors swarming to value stocks and safer assets for protection, leaving the Industrials drowning in the red. But as long-term investors, this doesn't mean that we should completely ignore tech stocks for the time being. In fact, there are several companies that continue to deliver strong financial results in spite of the challenges our current economy presents. One of those companies, United Parcel Service, Inc. (UPS 1.29%), is a world-beater that can provide investors with much-needed security in today's market environment. And since it's down almost -19.27% year to date, the Integrated Freight & Logistics juggernaut grants investors a handsome valuation at present levels. A resilient business - United Parcel Service, Inc. - Stock Analysis In the past quarters, United Parcel Service, Inc. has beaten earnings estimates each time, and the company has only fallen short of Wall Street's revenue forecasts once. In the Q3 of 2021, the tech leader decreased both total sales and earnings per share by -13.07% year over year, up to $23.18B and $2.66, respectively. For the full fiscal year 2021, analysts are forecasting United Parcel Service, Inc.'s earnings per share to increase. Investors should like where the company is positioned today. Not only does its world-class core business offer stability on top of its persistent growth, but the company's services segment enjoys a long runway for expansion in the years ahead. Fortunately for United Parcel Service, Inc. and its shareholders, the company's elite balance sheet and cash generation will comfortably facilitate growth for the Industrials giant in the future. The company has $5.91B in cash on its balance sheet, and it continues to generate funds at a red-hot pace. In the past 12 months, United Parcel Service, Inc. has produced $5.05B in free cash flow (FCF), and its Compound annual growth rate (CAGR) is -22.03%. The company's robust balance sheet and consistent cash generation provide financial flexibility to increase its dividends, buy back shares, and grow its business in the years to follow. A normalized valuation The recent stock price pullback year to date has made United Parcel Service, Inc. stock a very tempting buy. The stock carries a price-to-earnings multiple of 27.5 today, representing its lowest trading level since the early summer of 2020. The Industrials company's current earnings multiple is also largely in line with its five-year historical average of 27.44. But given that United Parcel Service, Inc. has been able to maintain solid growth in recent quarters -- especially compared to the rest of the industry -- investors should be thrilled about buying the stock at existing levels. United Parcel Service, Inc. is a Buy Or Sell? United Parcel Service, Inc. is a wise investment today -- the world-leading Industrials continues to expand its business at a steady rate in an economy where many of its peers are suffering from growing pains. The stock is also trading at its lowest valuation since mid-2020, supplying investors with a favourable margin of safety. If you're searching for a durable stock to combat the market's volatility today, United Parcel Service, Inc. might be the choice for you.

back

United Parcel Service, Inc. is a good play on the turbulent stock market today

May 24, 2022

bullish

general Analysis

[3 min Read]

​​Here's why United Parcel Service, Inc. is a golden investment amid the ongoing tech sell-off.

The stock market has been a circus show in recent history, due to record-high inflation levels, the Fed's decision to raise interest rates in response, and lingering concerns in connection to the war between Russia and Ukraine.

Even big tech has struggled, with premier companies posting weaker-than-anticipated financial reports in recent quarters. The panic has sent investors swarming to value stocks and safer assets for protection, leaving the Industrials drowning in the red. But as long-term investors, this doesn't mean that we should completely ignore tech stocks for the time being.

In fact, there are several companies that continue to deliver strong financial results in spite of the challenges our current economy presents. One of those companies, United Parcel Service, Inc. (UPS 1.29%), is a world-beater that can provide investors with much-needed security in today's market environment. And since it's down almost -19.27% year to date, the Integrated Freight & Logistics juggernaut grants investors a handsome valuation at present levels.

A resilient business - United Parcel Service, Inc. - Stock Analysis

In the past quarters, United Parcel Service, Inc. has beaten earnings estimates each time, and the company has only fallen short of Wall Street's revenue forecasts once. In the Q3 of 2021, the tech leader decreased both total sales and earnings per share by -13.07% year over year, up to $23.18B and $2.66, respectively.

For the full fiscal year 2021, analysts are forecasting United Parcel Service, Inc.'s earnings per share to increase. Investors should like where the company is positioned today. Not only does its world-class core business offer stability on top of its persistent growth, but the company's services segment enjoys a long runway for expansion in the years ahead.

Fortunately for United Parcel Service, Inc. and its shareholders, the company's elite balance sheet and cash generation will comfortably facilitate growth for the Industrials giant in the future. The company has $5.91B in cash on its balance sheet, and it continues to generate funds at a red-hot pace. In the past 12 months, United Parcel Service, Inc. has produced $5.05B in free cash flow (FCF), and its Compound annual growth rate (CAGR) is -22.03%. The company's robust balance sheet and consistent cash generation provide financial flexibility to increase its dividends, buy back shares, and grow its business in the years to follow.

A normalized valuation

The recent stock price pullback year to date has made United Parcel Service, Inc. stock a very tempting buy. The stock carries a price-to-earnings multiple of 27.5 today, representing its lowest trading level since the early summer of 2020.

The Industrials company's current earnings multiple is also largely in line with its five-year historical average of 27.44. But given that United Parcel Service, Inc. has been able to maintain solid growth in recent quarters -- especially compared to the rest of the industry -- investors should be thrilled about buying the stock at existing levels.

United Parcel Service, Inc. is a Buy Or Sell?

United Parcel Service, Inc. is a wise investment today -- the world-leading Industrials continues to expand its business at a steady rate in an economy where many of its peers are suffering from growing pains. The stock is also trading at its lowest valuation since mid-2020, supplying investors with a favourable margin of safety. If you're searching for a durable stock to combat the market's volatility today, United Parcel Service, Inc. might be the choice for you.

page loading card

UPS

United Parcel Service, Inc.

183.79

-1.20
-0.65%

Return

7.42%
Change % Since Posting
12.69
Change Since Posting
171.10
Price When Posted

Metrics

188.10
Target Price
6/ 10
Confidence
1-2 Months
Timeframe
catalyst icon
Earnings Release
catalyst icon
News
catalyst icon
SEC
Filing
catalyst icon
Sentiment
catalyst icon
Other Catalyst

Access the latest tools and discussion channels with an account

reddit-sentiment

Reddit Sentiment
Analysis

portfolio-balancer

Portfolio Balancer
with brokerages

sec-dashboard

SEC Dashboard
with NLP

aiodd-ad
next