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Excerpt from Morningstar article (Oct. 28) by Pat Dorsey CFA.

FedEx (NYSE:FDX - News) and United Parcel Service (NYSE:UPS - News) also help illustrate where we draw the line. Although they look similar on the surface, UPS typically posts ROICs in the 15% range, which we think will improve to 20% in time, while FedEx has been posting high-single-digit returns on capital that we're projecting to only improve to a bit more than 11%. One reason for this is that planes make up a bigger portion of FedEx's capital base, and planes are more-expensive (and less productive) assets than the ubiquitous brown trucks that comprise a big chunk of UPS' invested capital. Second, a larger portion of FedEx's business comes from overnight/time-sensitive package delivery, which is a more competitive market than the residential package delivery that's UPS' bread and butter. The bottom line is that UPS delivers way more packages with a similar asset base than FedEx, which makes UPS a more attractive business.