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The first metric to look at when comparing two stocks is the fundamentals. First let's look at FedEx (FDX).

FDX:

  • Market Cap: 27 Billion
  • PE Ratio: 15.4
  • 1 year growth rate: 21.43%
  • 5 year growth rate: -4.74%
  • Dividend Yield: 0.61%
  • Total Cash: 1.96 Billion
  • Total Debt: 1.67 Billion

Now let's compare these numbers with the same numbers for UPS.

  • Market Cap: 69 Billion
  • PE Ratio: 17.4
  • 1 year growth rate: 62.24%
  • 5 year growth rate: .06%
  • Dividend Yield: 2.90%
  • Total Cash: 5.45 Billion
  • Total Debt: 12.42 Billion

While UPS is a larger company, it seems to be growing faster than FDX. For this reason UPS trades at a higher PE Ratio than FDX. The other major difference betweeen FDX and UPS is the dividend. FDX pays a very small dividend of 0.61% while UPS pays a more significant 2.90%. This difference in dividend yield is enough to give UPS the win in the head to head fundamentals. Now lets look at the charts to see who they favor.

FDX

click to enlarge

(cnbc)

The chart shows the FDX is trading below its 200 day moving average (orange) and above its 50 day moving average (green). This means that the stock is below the 200 day moving average and the 50 day moving average is below the 200 day moving average. This is a bearish set up. As you can see, in 2009 the opposite was the case. The stock was above the 50 day moving average and the 200 day moving average was below the 50 day moving average. This set up a powerful rally that would last for many months. The current situation does not indicate than an a strong uptrend is in place. Lets see what UPS chart looks like.

UPS

(cnbc)

In this chart, the stock is above the 200 day moving average. This is a positive sign, but not the only positive in this chart. The other positive is that the 50 day moving average (green) is approaching and will very likely cross through the 200 day moving average (orange). A bullish scenario where the stock is above the 50 day moving average and the 50 day is above the 200 day is likely to occur soon.

Conclusion: UPS is a better stock to buy than FDX. While the companies are similar, UPS stock is better than FDX. The charts confirm the fundamentals that show UPS is superior to FDX.

Source: UPS: A Better Buy Than FedEx