Too many investors get too excited about certain stocks, jumping in without comparing them to other possibilities. This is equally true for great investments and terrible ones. That's why I'm about to play devil's advocate.
In this series, I try to help investors see greater possibilities by highlighting a few other companies to consider before you take the plunge into a given stock.
Today's stock is United Parcel Service (NYSE: UPS). I'll start us off slow with its main competitor, and then tell you about two less direct shipping/transport players.
FedEx (NYSE: FDX)
When doing your due diligence on UPS, you at least have to look at FedEx. Otherwise, it's like buying shares in Coca-Cola without considering PepsiCo. To start you off, note that both UPS and FedEx beat analyst estimates for earnings in their latest quarters. FedEx is trading a little cheaper, but it pays a smaller dividend yield.
Diana Shipping (NYSE: DSX)
If dry bulk shipping is your fancy, my colleague Jennifer Schonberger found Diana Shipping in her screen for ironclad balance sheets. Since then, it's beaten Q2 analyst estimates by a penny, generating $0.42 per share in earnings.
Fellow Fool Christopher Barker likes Diana Shipping better than all the other dry bulk shippers – especially DryShips (Nasdaq: DRYS).
Atlas Pipeline Partners (NYSE: APL)
This company transports and processes natural gas. With natural gas prices in the tank, Atlas has been suffering along with the rest of the industry. However, you'll notice that although shares of natural gas producers like Encana (NYSE: ECA) and Chesapeake Energy (NYSE: CHK) are also down significantly from their 2008 highs, both of those companies are currently paying dividends and recording profits on a trailing-12-month basis.
That said, investors have boosted this stock to a double in less than three months. (Click here for more on Atlas.)
The final reminder
As you decide between UPS and these other alternatives (or none of the above), remember that I don't intend these companies as recommendations, or as a criticism of UPS. It's simply always a good idea to analyze many semi-related companies before you make any buy decision. Good luck!
For more stock alternatives, I did the same exercise for FedEx.
