FedEx Corporation (FDX), United Parcel Service, Inc. (UPS): This Express Delivery Stock Is a Long-Term Buy

The most profitable but cheaply valued

At around $98 per share, FedEx Corporation (NYSE:FDX) is worth nearly $31 billion on the market. The market values FedEx at 6.24 times EV/EBITDA. Compared to its peers, including United Parcel Service, Inc. (NYSE:UPS) and Deutsche Post AG (FRA:DPW), FedEx has the lowest valuation.

UPS is trading at nearly $85 per share, with a total market cap of nearly $81 billion. It is the most expensively valued at 26.75 times EV/EBITDA. Deutsche Post, at around $24 per share, has a total market cap of nearly $29 billion. Deutsche Post is valued at nearly 8.7 times EV/EBITDA.

Interestingly, FedEx Corporation (NYSE:FDX) is the most profitable company with the highest operating margin at 7.35%, while Deutsche Post has around 3% operating margin. United Parcel Service, Inc. (NYSE:UPS) has the lowest operating margin at 2.45%. Among the three, Deutsche Post has the highest trailing annual dividend yield at 3.9%. UPS ranks second with a 2.8% dividend yield, while FedEx pays investors the lowest dividend yielding only 0.6%.

Foolish bottom line

I personally think that FedEx has a wide moat with its international shipping network. DHL Express (USA), Inc., one of its privately-held peers, had to exit the domestic U.S. parcel delivery market several years ago. With a low valuation, high operating margin, and a market leading position, FedEx Corporation (NYSE:FDX) could fit well in the long-term portfolio of patient investors.

The article This Express Delivery Stock Is a Long-Term Buy originally appeared on Fool.com and is written by Anh HOANG.

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