FedEx Corporation (FDX) vs United Parcel Service, Inc. (UPS): Which Is the Better Buy in 2026?
As of 2026-09-17, FDX is undervalued at $302, with a DCF intrinsic value of $702 and a margin of safety of 57%. UPS is undervalued at $99, with an intrinsic value of $154 and a margin of safety of 36%. Of the two, FDX has the wider margin of safety.
Rewards
- ★Free cash flow has grown at a 24.1% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $1.28 of earning power — management is creating shareholder value.
- ★United Parcel Service, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★United Parcel Service, Inc. scores 72/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
Risks
- ⚠FCF yield of 7.9% suggests reasonable valuation assuming continued moderate growth.
- ⚠Gross margin of 22.4% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠FCF yield of 6.7% suggests reasonable valuation assuming continued moderate growth.
- ⚠High leverage (1.59x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $302?
The market implies +7.8% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +6.2%, reflecting ongoing growth investment.
What growth rate is the market pricing in at $99?
The market implies +7.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +7.2%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: FDX vs UPS
Is FedEx Corporation or United Parcel Service, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, FDX trades at a 57.0% margin of safety (intrinsic value $702 vs. price $302), compared to UPS's 35.9% margin of safety (intrinsic $154 vs. $99).
Which stock has a wider economic moat, FedEx Corporation or United Parcel Service, Inc.?▼
UPS scores 72/100 (Wide moat), while FDX scores 57/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is FedEx Corporation in financial distress?▼
FDX's Altman Z-Score of 2.6 places it in the Grey zone, signaling elevated bankruptcy risk. UPS scores 2.9 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, FedEx Corporation or United Parcel Service, Inc.?▼
FedEx Corporation (FDX) generates a 7.9% free cash flow yield, compared to United Parcel Service, Inc.'s 6.7%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, FedEx Corporation or United Parcel Service, Inc.?▼
UPS earns 14.7% ROIC versus FDX's 11.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, FedEx Corporation's or United Parcel Service, Inc.'s?▼
FDX's dividend earns a safety score of 94/100 (Very Safe), compared to UPS's 34/100 (Unsafe). FDX has raised its dividend for 3 consecutive years.