United Parcel Service (NYSE: UPS) and Expeditors International of Washington (NASDAQ:EXPD) are both large-cap transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitabiliy, institutional ownership, analyst recommendations, dividends and earnings.
Institutional & Insider Ownership
53.2% of United Parcel Service shares are owned by institutional investors. Comparatively, 94.2% of Expeditors International of Washington shares are owned by institutional investors. 0.6% of United Parcel Service shares are owned by insiders. Comparatively, 0.8% of Expeditors International of Washington shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Dividends
United Parcel Service pays an annual dividend of $3.32 per share and has a dividend yield of 3.0%. Expeditors International of Washington pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. United Parcel Service pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Expeditors International of Washington pays out 35.7% of its earnings in the form of a dividend. United Parcel Service has raised its dividend for 22 consecutive years and Expeditors International of Washington has raised its dividend for 7 consecutive years. United Parcel Service is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares United Parcel Service and Expeditors International of Washington’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| United Parcel Service | $62.92 billion | 1.55 | $7.85 billion | $4.07 | 27.53 |
| Expeditors International of Washington | $6.22 billion | 1.73 | $711.85 million | $2.35 | 25.34 |
United Parcel Service has higher revenue and earnings than Expeditors International of Washington. Expeditors International of Washington is trading at a lower price-to-earnings ratio than United Parcel Service, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for United Parcel Service and Expeditors International of Washington, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Parcel Service | 0 | 10 | 4 | 0 | 2.29 |
| Expeditors International of Washington | 1 | 5 | 2 | 0 | 2.13 |
United Parcel Service currently has a consensus target price of $113.42, indicating a potential upside of 1.22%. Expeditors International of Washington has a consensus target price of $57.25, indicating a potential downside of 3.88%. Given United Parcel Service’s stronger consensus rating and higher probable upside, analysts plainly believe United Parcel Service is more favorable than Expeditors International of Washington.
Profitability
This table compares United Parcel Service and Expeditors International of Washington’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Parcel Service | 5.68% | 417.18% | 13.38% |
| Expeditors International of Washington | 6.87% | 23.01% | 15.25% |
Volatility and Risk
United Parcel Service has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Expeditors International of Washington has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.
Summary
United Parcel Service beats Expeditors International of Washington on 10 of the 17 factors compared between the two stocks.
About United Parcel Service
United Parcel Service, Inc. (UPS) is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. The Company offers a spectrum of the United States domestic guaranteed ground and air package transportation services. The International Package segment includes the small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, the Middle East and Africa. The Supply Chain & Freight segment includes its forwarding and logistics services, truckload freight brokerage, UPS Freight and its financial offerings through UPS Capital. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics and ground freight.
About Expeditors International of Washington
Expeditors International of Washington, Inc. is a logistics company. The Company is a third-party logistics provider, and purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers. The Company provides a range of customer solutions, such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance and customized logistics solutions. In addition, the Company’s Project Cargo unit handles special project shipments that move through a single method or combination of air, ocean, and/or ground transportation. The Company’s services include airfreight services, ocean freight and ocean services, and customs brokerage and other services. The Company operates along five geographic areas: the Americas; North Asia; South Asia; Europe, and the Middle East, Africa and India.
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