Comments on: Examining United Parcel Service’s (UPS) Moat

By: Dividend Growth Investor

Dividend Growth Investor — Sat, 28 Jun 2008 14:17:48 +0000

[...]Contrarian Value Investing was Examining United Parcel Service’s (UPS) Moat[...]

By: Michael

Michael — Thu, 26 Jun 2008 12:09:47 +0000

Nice article about UPS.
Thanks for showing the advantages of UPS.

I think you are right “UPS is generally considered more consumer oriented, while FedEx is considered more business oriented”

By: alexg

alexg — Mon, 23 Jun 2008 23:25:01 +0000

The P/E ratio reflects a one-time charge they took related to their pension plans. That charge reduced earnings by $6.1 billion. Without the one-time charge, the actual p/e is around 17, based on this year’s expected earnings.

By: Ryan

Ryan — Sat, 21 Jun 2008 18:19:23 +0000

Looking at both the business situation (as you described) and the numbers (cash flow, revenues, return on equity, debt to equity), there’s no doubt UPS is a great company.

That said, I’ve rarely seen a company priced so high. The price to earnings ratio is over 147! The price to cash flow ratio is over 36!

How do you justify buying such an expensive company? Did you get in when it was much cheaper, or do you believe it’s under priced even at those obscene valuation ratios?

Thanks for the interesting article.