The presentation describes a brief comparison between UPC and UPS in terms of their values in the market, using yahoo finance.

2. COUNTRY
The United States offers the
largest consumer market on
earth with a GDP of $20
trillion and 325 million
people. Household
spending is the highest in
the world, accounting for
nearly a third of global
household consumption.

3. WHY USA?
Pros Cons
1. Diversification - is an important part of an
investment journey. It helps one reduce
volatility and risk of their portfolio, especially
at larger portfolio sizes.
2. Size - US equity markets are the largest
equities markets in the world. As an investor
looking to build long term wealth with
equities, over decades, you should have
some exposure to largest equity market in
the world.
3. Some of the biggest and most famous
brands and companies are listed in the US.
1. Currency risk – (If) you are foreign
investor, you will face currency risks. If
you're are a foreign resident, your
investments would be valued in the
currency of your country. And not in USD
(US Dollar).
If the currency of your motherland
appreciates against USD, then your US
investments would lose its market value,
and show up as a loss in your portfolio.
2. Taxation and Compliance – US taxation
rules are different from other countries’
taxation rules.

4. GENERAL THOUGHTS
There are great reasons to invest in US equity. It
adds much needed geographic diversification
to your portfolio, and gives you exposure to
equities that reflect global revenue and
economic growths, in a stable currency that's
recognized all over the world.
If you can take cost-effective positions in US
equities, and have well-tuned expectations; you
should go for it.

5. INDUSTRY
The logistics and transportation
industry in the US is highly
competitive. By investing in
this sector, multinational
firms position themselves to
better facilitate the flow of
goods throughout the world's
largest consumer market.

6. TYPE OF INVESTOR
Depending on the
situation and the
sector which we are
planning to invest, our
investment type will
change, but at the
current case we prefer
value type of
investment.

7. SCREENING (EQUITY ATTRIBUTES)
Warren Buffett screen (Financial Times):
Market Cap _____________________________________________ 94.9b-1.6t
Profit Margin __________________________________________-7.3m-36.3m
Profit Margin ‘5 year.avg’ _______________________________-166m-493.5k
EPS growth rate ‘5 year’ _____________________________________-88-712
Price to earnings ratio ________________________________________0-11.2b
Price to cash flow __________________________________________0-181.4b
Price to book value __________________________________________0-35.3b
ROI ‘5 year’ __________________________________________-33.9k-387.1k
Interest cover ‘TTM’ ______________________________________-48.3k-1m

8. SCREENING (EQUITY ATTRIBUTES)
In the result we got 2 companies:
1. Union Pacific Corp
2. United Parcel service Inc

9. Piotroski F-Score Value
Investing Model
Points
(Union Pacific
Corp)
Points (United Parcel
service Inc)
Current Return On Assets 1 1
Change in Return on Assets 0 1
Cash Flow Return on Assets 1 1
Current Quality of Earnings 0 0
Asset Turnover Growth 1 1
Current Ratio Change 1 1
Long Term Debt Over Assets
Change
1 0
Change In Outstanding Shares 0 0
Change In Gross Margin 0 1
Total 5 6

10. Relative analysis United Parcel
Service Inc.
Union Pacific
Corp.
Selected Financial Data:
Current share price (P) $179.69 $220.67
No. shares of common stock outstanding 867,038,529 669,829,363
Growth rate (g) -46.39% 19,99%
Earnings per share (EPS) $1.55 $7.99
Next year expected EPS $0.83 $9.58
Operating profit per share $8.86 $11.70
Sales per share $97.61 $29.16
Book value per share (BVPS) $0.76 $25.32
Valuation Ratios (Price Multiples):
Price to earnings (P/E) 116.01 27.63
Price to next year expected earnings 216.38 23.03
Price to operating profit (P/OP) 20.28 18.87
Price to sales (P/S) 1.84 7.57
Price to book value (P/BV) 237.14 8.72

11. RECOVERIES FROM PREVIOUS CRISES
Before going straight to COVID, we can mention about the recovering
period of the company during 2008 financial crises which put some
serous marks in the transporting industry.

13. UPS DURING COVID 19

14. UPS DURING COVID 19

17. OUTLOOK FOR 2021 UPS

18. 2021 CAPITAL ALLOCATION
• Expect CAPEX to be about $4B
• Dividends expected to grow,
subject to Board approval
• Expect to pay off $2.5B of funded
debt
• No plans to repurchase shares or
access the debt capital markets in
2021
• Effective tax rate is expected to be
~23.5%

19. NOPAT & WORKING CAPITAL REQUIREMENT
CALCULATION
Actual Actual Actual Forecast Forecast Forecast Forecast Forecast
2018 2019 2020 2021 2022 2023 2024 2025
Sales 71,861.00 74,094.00 84,628.00 92,236.06 101,450.44 109,566.47 118,331.79 127,798.34
Growth rate 8.06% 3.1% 14.2% 9.0% 10.0% 8.0% 8.0% 8.0%
EBIT 6,624.00 6,305.00 2,545.00 3,330.06 4,397.27 5,701.43 7,392.40 9,584.88
EBIT margin 9.2% 8.5% 3.0% 3.6% 4.3% 5.2% 6.2% 8%
CAGR 20.1%
Pretax Income 6,019.00 5,652.00 1,844.00
Tax Provision 1,228.00 1,212.00 501.00
Effective tax rate 20.4% 21.4% 27.2% 23.0%
NOPAT 2,563.98 3,385.67 4,389.82 5,691.78 7,379.87
Cost of revenue 59,372.00 60,377.00 69,344.00 75,648.15 83,205.40 89,861.83 97,050.78 104,814.84
CoR/Sales 83% 81% 82% 0.82
Receivables 9,898.00 9,934.00 10,750.00 12,262.40 13,487.42 14,566.41 15,731.72 16,990.26
DSO 50.27 48.94 46.36 48.53
Inventory 421.00 511.00 620.00 617.67 679.38 733.73 792.43 855.82
DIO 2.59 3.09 3.26 2.98
Payables 5,188.00 5,555.00 6,455.00 6,989.73 7,631.11 8,180.62 8,769.69 9,401.18
DPO 31.89 33.58 33.98 33.73 33.48 33.23 32.98 32.74
CAGR -0.7%
WCR 5,131.00 4,890.00 4,915.00 5,890.35 6,535.68 7,119.52 7,754.46 8,444.90
WCR/Sales 7.1% 6.6% 5.8% 6.4% 6.4% 6.5% 6.6% 6.6%
Changes in WCR - 241.00 25.00 975.35 645.33 583.84 634.94 690.44

20. CapEx 6,283.00 6,380.00 5,412.00 5,988.88 6,688.05 7,333.73 8,041.73 8,818.09
CapEx/Sales 9% 9% 6% 6.5% 6.6% 6.7% 6.8% 6.9%
CAGR 1.5%
DA 2,207.00 2,360.00 2,698.00 3,431.57 4,404.64 5,551.35 6,996.59 8,818.09
DA/Sales 3.1% 3.2% 3.2% 3.7% 4.3% 5.1% 5.9% 6.9%
CAGR 16.7%
NOPAT 2,563.98 3,385.67 4,389.82 5,691.78 7,379.87
DA 3,431.57 4,404.64 5,551.35 6,996.59 8,818.09
Changes in WCR 975.35 645.33 583.84 634.94 690.44
CapEx 5,988.88 6,688.05 7,333.73 8,041.73 8,818.09
FCFF - 968.7 457 2,024 4,012 6,689.4
CAPEX, DEPRECIATION & FREE CASH FLOW TO FIRM
CALCULATIONS

21. WACC CALCULATION
Market
Capitalization 174,400.00
Short term debt 19,537.00
Long term debt 22,031.00
Invested capital 215,968.00
Share of equity 81%
Share of debt 19%
Risk free rate 1.14%
Beta 0.62
ERP 4.14%
Cost of equity 3.71%
EBIT 2,545.00
Interest expense 701.00
Interest coverage
ratio
3.63
Spread 1.33%
Cost of debt 2.47%
WACC 3.34%

22. VALUE OF EQUITY CALCULATION
Period 1 2 3 4 5
FCFF - 968.68 456.93 2,023.60 4,011.70 6,689.44
Discount factor 0.97 0.94 0.91 0.88 0.85
PV FCFF - 937.38 427.87 1,833.68 3,517.72 5,676.18
Sum of PV FCFF 10,518.07
Growth rate in
perpetuity 1%
Terminal value (TV) 288,783.26
PV of TV 245,040.83
EV 255,558.90
Total debt 41,568
Cash 3,449.00
Value of equity 217,439.90
Market
capitalization 174,400.00
Upside potential 25%

23. SENSITIVITY ANALYSIS
Base case
EBIT margin 217,439.90 0.07 7.5% 0.08
214592.373 217439.902 220287.139
- 0.013 0.00% 1.31%
DSO 217,439.90 0.48 49% 0.49
279006.456 279000.237 278994.018
28.31% 28.31% 28.31%
DIO 217,439.90 0.03 3% 0.03
220541.103 220540.79 220540.477
1.426% 1.426% 1.426%
DPO 217,439.90 0.32 33% 0.33
181020.934 180992.011 180963.216
-16.75% -16.76% -16.78%

24. CONCLUSION
After reviewing and analysing the country, industry and the companies we
have come up with some conclusions:
• If you are a foreigner and want to invest, than it is better to not invest in
the US, the reasons we have mentioned in our previous slides.
• After doing analysis, we can say that UPS is a good company to invest
in, if you are an American investor or your financial resources are in the
US.
• The company has a positive future, because the adjustability which they
have inside of their structure and it can help them to survive during
pandemic or any other problems.

25. REFERENCES
1. Brand-approved PowerPoint Presentation (ups.com)
2. When you’re trying to conquer the world, it helps to have a great wingman
(ups.com)
3. Microsoft PowerPoint - 4Q20 Earnings Webcast Deck FINAL (ups.com)
4. PowerPoint Presentation (ups.com)
5. Investors: UPS
6. stories.ups.com
7. markets.ft.com
8. finance.yahoo.com
9. www.wsj.com
10. www.macrotrends.net

26. THANK YOU FOR YOUR ATTENTION!
IF YOU HAVE ANY QUESTIONS PLEASE
DO NOT HESITATE TO ASK!