The coronavirus pandemic has been good for UPS (UPS). The package delivery giant’s share price rose from $116.79 on 2 January 2020 to $175.18 on 18 December 2020.
Notably, UPS (NYSE: UPS) is so busy it is telling customers pickups could be delayed, eSeller Cafe claims. Moreover, demand for UPS’s delivery service is so high that there is a shortage of delivery vans in America, Bloomberg claims. Package delivery companies placed order for over 15,000 vans, eSeller Cafe claims.
If those claims are true, I think they indicate UPS could experience massive growth in 2020. To elaborate, UPS claims to have delivered 21.9 million packages and documents a day in 2019.*
UPS’s Market experiences Enormous Levels of Growth
I think the delays show the growth in UPS’s package volume is massive because UPS claimed to own 125,000 package delivery vehicles in 2019.* Hence, UPS’s fleet of 125,000 vehicles cannot keep up the new demand in the pandemic economy.
UPS’s delivery network grid locked because US ecommerce sales grew by 37.1% in the 3rd quarter of 2020, Digital Commerce 360 estimates. That was a slowdown from second quarter 2020 when American ecommerce grew by 44.4%.
Therefore, UPS’s market is experiencing enormous growth. Consequently, I consider UPS a growth stock but does it make money?
Is UPS Making Money?
UPS (UPS) makes money from that growth. UPS reported a quarterly gross profit of $16.107 billion on 30 September 2020.
The quarterly gross profit rose from $15.69 billion on 30 June 2020 and $13.78 billion on 31 March 2020. UPS began 2020 with a quarterly gross profit of $15.644 billion on 31 December 2019.
United Parcel Service (NYSE: UPS) reported a quarterly operating income of $2.363 billion on 30 September 2020. The quarterly operating income rose from $2.212 billion on 30 June 2020 and $1.072 billion on 31 March 2020. UPS began 2020 with a quarterly operating income of $2.133 billion on 31 December 2019.
Thus, UPS makes enormous amounts of money from that growth. UPS is a great growth stock because its income, revenues, gross profit, and cash are growing.
How Much Cash Does UPS Have?
UPS can generate enormous amounts of cash. UPS (UPS) reported a quarterly operating cash flow of $3.336 billion on 30 September 2020.
The quarterly operating cash flow fell from $3.397 billion on 30 June 2020 and fell from $2.55 billion on 31 March 2020. UPS began 2020 with an operating cash flow of $2.946 billion on 31 December 2019.
In 2020, UPS’s quarterly ending cash flow rose from $1.053 billion on 31 March 2020 to -$142 million on 30 June 2020 and $26 million on 30 September.
UPS can Borrow enormous amounts of cash
Impressively, UPS can borrow enormous amounts of cash. UPS reported a quarterly financing cash flow of $2.167 billion on 31 March 2020.
Importantly, UPS can pay off enormous amounts of debt. UPS reported a negative quarterly financing cash flow of -$2.566 billion on 30 June 2020 and -$2.157 billion on 30 September 2020.
UPS had $9.241 billion in cash and short-term investments on 30 September 2020. UPS had $5.471 billion in cash and short-term investments on 31 December 2019.
Thus, UPS is a cash-rich company that tries to avoid debt. Importantly, UPS’s cash is growing in a pandemic. Thus, UPS is a cash-rich growth stock with value characteristics.
What Value does UPS have?
UPS (UPS) has an enormous value: $62.406 billion in Total Assets on 30 September 2020.
The Total Assets grew from $57.857 billion on 31 December 2020. Hence, UPS total assets grew by $5.49 billion in the first three quarters of 2020.
I consider UPS (NYSE: UPS) a wonderful dividend stock because it paid a $1.01 quarterly dividend on 12 November 2020. That quarterly dividend grew from 96¢ on 15 November 2019. Overall, Dividend.com estimates UPS paid a $4.04 annual dividend and offered a dividend yield of 2.37% on 18 December 2020.
I think UPS is a total package stock that offers, growth, cash, value, and dividends. If you are seeking a good all-around stock, you need to investigate UPS.
*file:///home/dan/Downloads/UPS_Fact_Sheet.pdf
Originally published at https://marketmadhouse.com on December 18, 2020.
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