ZTO Express (Cayman) (NYSE: ZTO) and United Parcel Service (NYSE:UPS) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.
Institutional & Insider Ownership
28.8% of ZTO Express (Cayman) shares are held by institutional investors. Comparatively, 54.1% of United Parcel Service shares are held by institutional investors. 0.6% of United Parcel Service shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
United Parcel Service pays an annual dividend of $3.64 per share and has a dividend yield of 3.5%. ZTO Express (Cayman) does not pay a dividend. United Parcel Service pays out 60.6% of its earnings in the form of a dividend. United Parcel Service has raised its dividend for 8 consecutive years.
This table compares ZTO Express (Cayman) and United Parcel Service’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ZTO Express (Cayman)||24.26%||15.52%||13.11%|
|United Parcel Service||7.45%||477.77%||12.76%|
Valuation and Earnings
This table compares ZTO Express (Cayman) and United Parcel Service’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ZTO Express (Cayman)||$2.01 billion||3.77||$485.63 million||$0.69||21.59|
|United Parcel Service||$65.87 billion||1.38||$4.91 billion||$6.01||17.53|
United Parcel Service has higher revenue and earnings than ZTO Express (Cayman). United Parcel Service is trading at a lower price-to-earnings ratio than ZTO Express (Cayman), indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for ZTO Express (Cayman) and United Parcel Service, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ZTO Express (Cayman)||1||0||2||0||2.33|
|United Parcel Service||1||9||7||0||2.35|
ZTO Express (Cayman) presently has a consensus target price of $17.90, indicating a potential upside of 20.13%. United Parcel Service has a consensus target price of $124.07, indicating a potential upside of 17.79%. Given ZTO Express (Cayman)’s higher possible upside, analysts plainly believe ZTO Express (Cayman) is more favorable than United Parcel Service.
Volatility and Risk
ZTO Express (Cayman) has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, United Parcel Service has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.
United Parcel Service beats ZTO Express (Cayman) on 11 of the 17 factors compared between the two stocks.
ZTO Express (Cayman) Company Profile
ZTO Express (Cayman) Inc. is an express delivery company in China. The Company provides express delivery service through its nationwide network, as well as other value-added logistics services. The Company provides its services for a range of online merchants and consumers transacting on the Chinese e-commerce platforms, such as Alibaba and JD.com. The Company leverages its network partners to provide pickup and last-mile delivery services, while it controls the line-haul transportation and sorting network within the express delivery service value chain. The Company offers fee sharing mechanism, in which the pickup and delivery outlets share the delivery service fees of each delivery order. As of October 26, 2016, the Company had centralized control and management of 74 sorting hubs and a fleet of over 3,300 trucks. It also offers route planning and optimization, as well as waybill tracking system and transportation management system.
United Parcel Service Company Profile
United Parcel Service, Inc. provides letter and package delivery, specialized transportation, logistics, and financial services. It operates through three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services in Europe, the Asia Pacific, Canada and Latin America, the Indian sub-continent, the Middle East, and Africa. This segment offers guaranteed time-definite express options, including Express Plus, Express, and Express Saver. The Supply Chain & Freight segment provides international air and ocean freight forwarding, customs and truckload freight brokerage, distribution and post-sales, and mail and consulting services in approximately 220 countries and territories; and less-than-truckload and truckload services to customers in North America. The company also offers shipping, visibility, and billing technologies; and insurance, financing, and payment services. It operates a fleet of approximately 119,000 package cars, vans, tractors, and motorcycles; and owns 45,000 containers that are used to transport cargo in its aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.
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