Is United Parcel Service, Inc. (UPS) a Good Stock to Buy?

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We can also compare UPS to C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Expeditors International of Washington (NASDAQ:EXPD), and UTi Worldwide Inc. (NASDAQ:UTIW). The forward earnings multiples of these companies are in the 17-18 range, which actually represents a premium to their larger peers (assuming, of course, that the sell-side is correct in their projections). Expeditors International of Washington (NASDAQ:EXPD) and UTi Worldwide appear to be in a similar position to UPS and FedEx Corporation (NYSE:FDX), with revenue showing little change in their most recent quarterly reports versus a year earlier but the former company showing a 9% decline in earnings while UTi Worldwide Inc. (NASDAQ:UTIW) was actually unprofitable. CH Robinson’s financials look better- for example, revenue grew 16% compared to the fourth quarter of 2011- and while we wouldn’t put too much weight on the Q4 performance that company at least looks somewhat interesting particularly compared to the rest of the industry.

Perhaps if United Parcel Service, Inc. (NYSE:UPS) does start reporting results that put it on track to meet analyst expectations we might start to think of it as offering “growth at a reasonable price.” However, revenue numbers for 2012 do not have the company growing fast enough to make it a good buy at current levels from our perspective. If there is a peer that is worth taking a closer look we think that it would be C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW).

Disclosure: I own no shares of any stocks mentioned in this article.

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