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FedEx Corporation (FDX) vs United Parcel Service, Inc. (UPS): Which Is the Better Buy in 2026?

As of 2026-08-03, FDX is undervalued at $307, with a DCF intrinsic value of $544 and a margin of safety of 43%. UPS is undervalued at $104, with an intrinsic value of $131131304196 and a margin of safety of 100%. Of the two, UPS has the wider margin of safety.

FDX
FedEx Corporation
$307.40
VS
UPS
United Parcel Service, Inc.
$104.22

Rewards

FDX
  • ★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.
UPS
  • ★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

FDX
  • ⚠FCF yield of 7.8% suggests reasonable valuation assuming continued moderate growth.
UPS
  • ⚠Gross margin of 21.2% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠High leverage (1.59x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
  • ⚠Free cash flow has declined at a 20.1% CAGR over the past 4 years — a concerning trend.

Key Valuation Metrics

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FDX
UPS
Valuation
$5.66B
Free Cash Flow
$4.98B
7.78%
FCF Yield
N/A
16.58
Trailing P/E
19.37
15.00
Forward P/E
12.91
Quality & Moat
11.16%
ROIC
7.08%
14.85%
ROE
29.60%
27.32%
Gross Margin
21.22%
1.30
PEG Ratio
1.63
Balance Sheet Safety
0.93
Net Debt / Equity
1.59
N/A
Interest Coverage
N/A
2.48
Net Debt / EBITDA
2.16
1.59%
Dividend Yield
6.29%
FDX: 6Ties: 1UPS: 4
FDXUPS

Historical Fundamentals

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FDX

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.

UPS

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

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FDX
$2.54
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$8.88B
Δ Market Cap
+$22.57B
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
UPS
$-0.00
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$1.89B
Δ Market Cap
$-74.65
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

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

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FDX
43.5% Margin of Safety
Price is 43.5% below estimated fair value
Current Price: $307.40
Fair Value: $543.65
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
UPS
100.0% Margin of Safety
Price is 100.0% below estimated fair value
Current Price: $104.22
Fair Value: $131131304195.96
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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FDX

What growth rate is the market pricing in at $307?

+8.0%
Market-Implied Owner Earnings Growth
Standard FCF implies +6.3%

The market implies +8.0% Owner Earnings growth, roughly in line with history — reasonably priced.

Standard FCF implies +6.3%, reflecting ongoing growth investment.

UPS

What growth rate is the market pricing in at $104?

-14.7%
Market-Implied Owner Earnings Growth
Standard FCF implies -12.7%

The market implies -14.7% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding -12.7%, reflecting heavy growth investment.

Economic Moat Score

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FDX
57/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 5 years of fundamental data.
UPS
72/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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FDX
-2.62
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.
UPS
-2.57
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.

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

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FDX
Insiders 7.5%Institutions 82.0%Retail & Other 10.5%
No. of Institutional Holders2,513
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
UPS
Insiders 0.0%Institutions 70.8%Retail & Other 29.2%
No. of Institutional Holders2,671
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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FDX
0
Buys (3M)
0
Buys (12M)
DIETRICH JOHN W
Chief Financial Officer
$273,980
@ $273.98 · 2025-01-07
LANE AMY BETH
Director
$91,929
@ $276.06 · 2024-12-26
Open market purchases · includes direct & indirect ownership · excludes option exercises
UPS
0
Buys (3M)
1
Buys (12M)
Total value (12M): $44,084
SHI CHRISTIANA SMITH
Director
$44,084
@ $88.17 · 2025-08-22
TOME CAROL B.
Chief Executive Officer
$1.00M
@ $85.67 · 2025-08-01
JOHNSON WILLIAM R
Director
$432,477
@ $86.50 · 2025-07-31
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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FDX
1
Sells (3M)
6
Sells (12M)
Total value (12M): $20.23M
WALSH PAUL S
Director
$1.64M
@ $324.56 · 2026-06-30
BRIGHTMAN TRACY B
Officer
$6.16M
@ $363.47 · 2026-04-15
SCHWAB SUSAN C
Director
$2.14M
@ $369.00 · 2026-04-15
PREET KAWAL
Officer
$1.80M
@ $367.89 · 2026-04-14
CARERE BRIE
Officer
$999,068
@ $370.03 · 2026-04-14
ADAMS GINA F
General Counsel
$7.49M
@ $366.45 · 2026-04-14
RAMO JOSHUA COOPER
Director
$838,361
@ $232.23 · 2025-07-23
ELLISON MARVIN R
Director
$855,353
@ $236.94 · 2025-07-09
WALSH PAUL S
Director
$860,241
@ $238.29 · 2025-07-08
MARTIN ROBERT BRAD
Director
$513,235
@ $241.75 · 2025-07-07
SMITH JOHN ALAN
Officer
$1.50M
@ $243.55 · 2025-03-27
ADAMS GINA F
General Counsel
$1.15M
@ $241.85 · 2025-03-24
SCHWAB SUSAN C
Director
$1.10M
@ $276.45 · 2025-01-14
SMITH RICHARD W.
Officer
$713,373
@ $276.93 · 2025-01-07
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
UPS
0
Sells (3M)
1
Sells (12M)
Total value (12M): $2.66M
BROTHERS NORMAN MICHAEL JR.
Officer
$2.66M
@ $106.15 · 2026-01-28
BROTHERS NORMAN MICHAEL JR.
Officer
$1.02M
@ $138.57 · 2024-11-25
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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FDX
FearGreed
😐Neutral(56/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
UPS
FearGreed
😐Neutral(45/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

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

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FDX
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (56)
UPS
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (45)
View FDX Full AnalysisView UPS Full Analysis

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, UPS trades at a 100.0% margin of safety (intrinsic value $131131304196 vs. price $104), compared to FDX's 43.5% margin of safety (intrinsic $544 vs. $307).

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 United Parcel Service, Inc. in financial distress?▼

UPS's Altman Z-Score of 2.0 places it in the Grey zone, signaling elevated bankruptcy risk. FDX scores 2.6 (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 stock has higher return on invested capital, FedEx Corporation or United Parcel Service, Inc.?▼

FDX earns 11.2% ROIC versus UPS's 7.1%. 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 25/100 (Unsafe). FDX has raised its dividend for 3 consecutive years.