FedEx vs. UPS: Which Is the Right One to Buy? (Hint: Go With The Higher Dividend)

Discussion in 'The Latest UPS Headlines' started by cheryl, Feb 4, 2011.

  1. cheryl

    cheryl I started this. Staff Member

    FedEx vs. UPS: Which Is the Right One to Buy? (Hint: Go With The Higher Dividend) - Seeking Alpha

    The world's two shipping companies are enjoying a massive rebound in volumes and revenue. United Parcel Service (UPS) reported earnings this week. The company reported that earnings surged 44% in the fourth quarter. UPS also stated that 2011 earnings per share should set an all-time high.

    Which shipping giant is the right one to buy, FedEx (FDX) or UPS? With a broad recovery in the shipping business, many investors are asking that question.

    In choosing between the stocks, I would recommend UPS. Even though UPS has higher debt, the company has rewarded shareholders to a greater degree. The return on equity is much better for UPS. It seems as though UPS is using its capital more efficiently than FedEx. UPS is a growth story in a rebounding sector. UPS should continue to outperform FedEx in your portfolio.