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6 Reasons to Why Investors Should Add UPS Stock to Portfolio Now
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United Parcel Service, Inc. (UPS - Free Report) is currently benefiting from multiple factors, including the uptick in e-commerce demand. In view of the tailwinds, we believe it’s time you add the stock to your portfolio.
Let’s discuss the factors that make UPS an Attractive Pick
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of UPS have returned 14.7% against a 0.9% loss of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: UPS currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, UPS seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: One estimate for 2022 moved north in the past 60 days with no southward revision, indicating analysts’ confidence in the company. The Zacks Consensus Estimate for 2022 earnings has moved up marginally in the past 60 days.
Positive Earnings Surprise History: UPS has an impressive earnings surprise history. Earnings outpaced the Zacks Consensus Estimate in all of the trailing four quarters, delivering an earnings surprise of 25%, on average.
Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $12.81, suggesting growth of 5.6% from the year-ago reported figure. UPS’s long-term expected earnings per share (EPS) growth rate is 12%.
Driving Factors: We are encouraged by UPS' solid free cash flow. UPS' free cash flow in 2018 increased to $6.13 billion, exceeding expectations. In 2019, UPS generated adjusted free cash flow in excess of $4.1 billion. Despite the uncertainties related to coronavirus, UPS generated impressive free cash flow of $5.1 billion in 2020. In 2021, the amount more than doubled to $10.9 billion. Robust free-cash-flow generation by UPS is a major positive and is leading to an increase in shareholder-friendly activities.
We are also impressed with UPS' environment-friendly approach. In June, UPS disclosed its intention to be carbon neutral across scope 1, 2 and 3 emissions in its global operations by 2050. The company aims to bring about a 50% reduction in carbon dioxide per package delivered for its global small package operations (2020 is considered to be the base year). The company also aims to ensure that by 2035 all its facilities are powered by renewable electricity. Moreover, 30% of the fuel used in its global air fleet by 2035 should be sustainable aviation fuel.
In spite of economies reopening, online shopping continues to be popular among consumers. We believe that demand for e-commerce-related package deliveries is likely to have remained strong and aided performance in first-quarter 2022. Detailed results will be available on Apr 27.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector can also consider stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has a surprise of 34.2%, with earnings surpassing the Zacks Consensus Estimate in the last four quarters. The uptick is aiding Expeditors’ airfreight revenues. We are optimistic about EXPD’s buyout of Fleet Logistics’ Digital Platform. The acquisition boosted Expeditors’ online LTL shipping platform Koho. The move is in sync with its focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1 (Strong Buy).
The long-term expected earnings per share (EPS) (three-to-five years) growth rate for Old Dominion is pegged at 16%. ODFL is benefiting from strong performance in the LTL segment, attributable to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has risen 10.1% in the past year. ODFL currently carries a Zacks Rank of 2.
The long-term expected EPS (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for TRTN. With coronavirus-led restrictions easing in the United States and Europe, TRTN saw a strong rebound in business in the third and the fourth quarter of 2020 as well as in each of the four quarters of 2021.
Driven by these positives, the stock has rallied 18.2% in the past year. TRTN is currently Zacks #2 Ranked.
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6 Reasons to Why Investors Should Add UPS Stock to Portfolio Now
United Parcel Service, Inc. (UPS - Free Report) is currently benefiting from multiple factors, including the uptick in e-commerce demand. In view of the tailwinds, we believe it’s time you add the stock to your portfolio.
Let’s discuss the factors that make UPS an Attractive Pick
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of UPS have returned 14.7% against a 0.9% loss of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: UPS currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, UPS seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: One estimate for 2022 moved north in the past 60 days with no southward revision, indicating analysts’ confidence in the company. The Zacks Consensus Estimate for 2022 earnings has moved up marginally in the past 60 days.
Positive Earnings Surprise History: UPS has an impressive earnings surprise history. Earnings outpaced the Zacks Consensus Estimate in all of the trailing four quarters, delivering an earnings surprise of 25%, on average.
Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $12.81, suggesting growth of 5.6% from the year-ago reported figure. UPS’s long-term expected earnings per share (EPS) growth rate is 12%.
Driving Factors: We are encouraged by UPS' solid free cash flow. UPS' free cash flow in 2018 increased to $6.13 billion, exceeding expectations. In 2019, UPS generated adjusted free cash flow in excess of $4.1 billion. Despite the uncertainties related to coronavirus, UPS generated impressive free cash flow of $5.1 billion in 2020. In 2021, the amount more than doubled to $10.9 billion. Robust free-cash-flow generation by UPS is a major positive and is leading to an increase in shareholder-friendly activities.
We are also impressed with UPS' environment-friendly approach. In June, UPS disclosed its intention to be carbon neutral across scope 1, 2 and 3 emissions in its global operations by 2050. The company aims to bring about a 50% reduction in carbon dioxide per package delivered for its global small package operations (2020 is considered to be the base year). The company also aims to ensure that by 2035 all its facilities are powered by renewable electricity. Moreover, 30% of the fuel used in its global air fleet by 2035 should be sustainable aviation fuel.
In spite of economies reopening, online shopping continues to be popular among consumers. We believe that demand for e-commerce-related package deliveries is likely to have remained strong and aided performance in first-quarter 2022. Detailed results will be available on Apr 27.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector can also consider stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has a surprise of 34.2%, with earnings surpassing the Zacks Consensus Estimate in the last four quarters. The uptick is aiding Expeditors’ airfreight revenues. We are optimistic about EXPD’s buyout of Fleet Logistics’ Digital Platform. The acquisition boosted Expeditors’ online LTL shipping platform Koho. The move is in sync with its focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1 (Strong Buy).
The long-term expected earnings per share (EPS) (three-to-five years) growth rate for Old Dominion is pegged at 16%. ODFL is benefiting from strong performance in the LTL segment, attributable to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has risen 10.1% in the past year. ODFL currently carries a Zacks Rank of 2.
The long-term expected EPS (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for TRTN. With coronavirus-led restrictions easing in the United States and Europe, TRTN saw a strong rebound in business in the third and the fourth quarter of 2020 as well as in each of the four quarters of 2021.
Driven by these positives, the stock has rallied 18.2% in the past year. TRTN is currently Zacks #2 Ranked.