7. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 43
United Parcel Service, Inc. (NYSE:UPS) ranks seventh on our list of the best freight stocks to buy now. United Parcel Service, Inc. (NYSE:UPS) is a global shipping and logistics company based in the United States. The company offers freight forwarding services as part of its supply chain solutions. The company offers air freight services to over 220 countries, moves ocean freight across 2,300 lanes, and offers ground-less-than-truckload freight.
43 hedge funds disclosed having stakes in United Parcel Service, Inc. (NYSE:UPS) at the end of Q1 2024. The total value of these stakes amounted to $969.77 million. As of March 31, Ken Griffin’s Citadel Investment Group is the largest stockholder in the company and has a stake worth $433.48 million. As of March 31, United Parcel Service, Inc. (NYSE:UPS) has a cash flow from operating activities of $3.3 billion, with a free cash flow of $2.3 billion, and a strong financial profile that can pay high dividends yielding 4.71%. In the first quarter of 2024, XPO, Inc. (NYSE:XPO) returned $1.3 billion in dividends. Here are some comments from Artisan Partners Q1 2024 investor letter:
“Despite the long-term growth tailwinds from the secular shift toward e-commerce, the shipping business is still cyclical, so disappointments will happen. However, we welcomed the market’s short-term focus as it provided us an opportunity to purchase UPS at an undemanding valuation of less than 11X our view of normalized earnings. UPS is a good transport operation that easily earns its cost of capital, generates significant free cash, has a wide economic moat, has a strong financial profile and pays an attractive dividend yielding 4%. With the new 5-year labor agreement completed, we believe UPS can focus on regaining lost volume and improving its cost structure.”
On April 23, United Parcel Service, Inc. (NYSE:UPS) reported market-beating earnings for the fiscal first quarter of 2024. The company reported revenue worth $21.7 billion and logged earnings per share of $1.43, beating estimates by $0.09. Analysts expect the company to grow its earnings by 18.68% in the next 12 months and by 6.8% over the next five years. In 2024, the company expects to generate almost $3 billion in global DAP revenue. The company’s tech prowess sets it apart from its competitors. The company has achieved a 74% reduction in pickup concerns and a Net Promoter Score of 48 using its new driver dispatch technology. Since April 2023, international customers using its next-gen brokerage solution have reported 40% fewer customer brokerage holds. In 2024, XPO, Inc. (NYSE:XPO) expects to generate a consolidated revenue between $92 to $94.5 billion and a consolidated operating margin ranging between 10% to 10.6%.
