With the economy in the midst of a recovery, package delivery companies have the potential to do well as consumers and businesses ramp up spending the demand for shipping both domestically and internationally could increase as well. With that in mind, let's discuss UPS (NYSE:UPS) and FedEx (NYSE:FDX) in a little more detail.

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Ship Shape
UPS, even with a market cap of $73 billion, has seen an increase in revenue, gross profit, operating income, and net income each year for the past 3 years. The stock is currently trading with a P/E ratio of about 19.5, and a fowrad P/E of 13.96. The comany's also currently yields a dividend of 3% but, because the stock is trading closer to its 52-week high than to its low, investors may want to wait for a pullback before buying in.

SEE: 9 Ways To Use A Tax Refund

What about UPS' main competitor, FedEx? Unfortunately, The company has missed some earnings estimates in the past, and FedEx doesn't appear to be fairing so well because of it. However, this may be good for investors looking for a bargain. The stock currently trades with a P/E of 13.78, and a forward P/E of 10.38. The company has seen slight income increases in the last two years, while remaining one of the market leaders. Again though, the company is trading closer to its 52-week high than its low and investors may want to keep an eye out for a slight pullback before betting on this one.

SEE: Analyst Forecasts Spell Disaster For Some Stocks

The Bottom Line
While some think that retailers along the lines of Wal-Mart (NYSE:WMT) or Macy's (NYSE:M) may be the best way to play the economic rebound underway, the big name package delivery companies deserve a look. However, UPS has been exceeding estimates with strong earnings growth potential, and may be the favourite at this time.

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