“I think FedEx is a much better investment,” said Donald Broughton, senior research analyst at Avondale Partners. “Twenty-seven percent of its revenue comes from international; only 17 percent of UPS’s does. You have a much better broad reach globally [with FedEx].”
Kevin Sterling, transportation analyst, at BB&T Capital Markets, called both shippers “attractive investments” with large international exposure. “If you look at UPS , it’s got a nice dividend and it is going to increase that next year,” he added.
“They [UPS] are going to get aggressive with the share buybacks, and also, UPS has the higher return characteristics and it has the higher margins than FedEx despite being unionized.”
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Disclosure information was not available for Donald Broughton or his company.