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Investors need a little Christmas, right this very minute. By that I mean we need insight into whether this Christmas season will be a good one or or bad one.

Judging from the numbers put out this week by FedEx Corporation (FDX) and United Parcel Service (UPS), it may pay to shop early.

That's because UPS, a self-described leader in logistics (meaning getting merchandise on shelves) is cutting its estimates for the fourth quarter. FedEx - which does more of the final delivery - is forecasting a 13% increase in shipments. That would be a stellar year.

So far this year, FDX is up almost 10% while UPS is flat, but the latter - which popped $2/share on the open today - is still trading at a higher earnings multiple, 18.3 vs. 14.5. That's probably because UPS' margins are higher than those of FDX, bringing in over $1 billion/quarter to the bottom line against a half-billion for FDX, even though the top line at UPS is only about 20% higher.

By contrast, FDX has much less debt as a percentage of assets than UPS, and its operating cash flow looks much stronger. All this tells me that if you believe Christmas will be special this year, FDX is in a better position to capitalize, while if you think the Grinch is going to steal it, go with UPS.

I'm with FDX.

Source: FedEx, UPS Disagree On Christmas