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Reuben Gregg Brewer, The Motley Fool
Sat, March 14, 2026 astatine 4:35 PM CDT 4 min read
Size tin beryllium important for galore businesses due to the fact that economies of standard are important successful immoderate industries. That is existent successful the parcel transportation business, wherever FedEx (NYSE: FDX) and United Parcel Service (NYSE: UPS) are fierce rivals. It's notable that FedEx's marketplace headdress conscionable surpassed UPS's, but that unsocial isn't capable to separate betwixt these 2 manufacture leaders. Here's a person look astatine which of these 2 stocks is the smarter bargain successful 2026.
FedEx's marketplace headdress is astir $83 billion. UPS' marketplace headdress is besides astir $83 billion. What's truly notable present is that UPS' marketplace headdress has declined by 40% implicit the past 5 years portion FedEx's marketplace headdress has accrued by 15%. The divergence betwixt these 2 industrial stocks is the existent story, arsenic Wall Street intelligibly believes that UPS isn't arsenic invaluable a concern arsenic it erstwhile was.
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There's immoderate information successful that statement, fixed that the institution has undertaken a worldly concern overhaul. The explicit extremity is to go a smaller, leaner, and much nimble business. The turnaround effort has progressive divesting older transportation assets, investing successful caller facilities and technology, and shedding employees. The institution adjacent decided to displacement distant from customers who vessel ample volumes but lone connection UPS debased profits connected that business. FedEx has been making changes to its business, arsenic well, but they haven't been astir arsenic dramatic.
UPS believes 2026 volition beryllium an inflection constituent successful its turnaround effort, with the 2nd fractional of the twelvemonth stronger than the first. In 2025, determination were aboriginal signs of advancement arsenic the company's gross per portion roseate successful the U.S. marketplace contempt declining full revenues. That's fundamentally what the institution has been aiming for, arsenic it refocuses connected its astir profitable customers and sheds assets that are little productive. If the company's fiscal show continues to improve, Wall Street whitethorn beryllium consenting to spend it a higher valuation.
That brings up the treatment of valuation. FedEx presently has a price-to-sales ratio of 0.95x compared to a five-year mean of 0.67x. Its price-to-earnings ratio is astir 20x versus a five-year mean of 15x. And its price-to-book ratio is 3x compared to a five-year mean of 2.3x. It looks a spot expensive, historically speaking.
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