Core Viewpoint - UPS is currently facing significant challenges due to lower volumes and higher costs, particularly from wage inflation resulting from a new contract with the Teamsters union, which has led to a decline in share performance compared to the S&P index [2][5] Current Headwinds - UPS reported a revenue of $21.7 billion for the first quarter, down 5.3% year-over-year, with diluted earnings per share of $1.43 reflecting a 35% decline compared to the same period in 2023 [5] - Average daily volume decreased by 3.2% year-over-year, with B2B average daily volume down 5.5%, primarily due to declines in retail and manufacturing sectors [5] Secular Tailwinds - Despite current challenges, e-commerce continues to gain market share, which is expected to benefit UPS in the long term [6] - UPS is expanding its addressable market share, particularly in big and bulky deliveries and healthcare logistics, aiming for $20 billion in annual revenue from healthcare by 2026 [6] Financials - The combination of higher costs and lower revenue has significantly impacted profitability, with normalized diluted earnings per share falling almost by half [7] - Management is optimistic about revenue growth in the second half of the year [7] Strong Competitive Moat - UPS maintains attractive returns on invested capital, reflecting its strong competitive moat derived from its scale advantages and logistics network [8] - The company has secured a profitable air cargo contract with the U.S. Postal Service, enhancing its competitive position [10] Returns Business - UPS is leveraging its extensive store network to expand its returns business through initiatives like Happy Returns, which offers convenient return options [11] Peers - UPS has a stronger competitive moat compared to FedEx and DHL Express, as evidenced by its superior financial metrics [12][13] Dividend Policy - UPS has a high dividend yield of approximately 4.7% and intends to maintain its dividend despite reduced earnings, with a targeted payout ratio of 50% [14][15] Balance Sheet - UPS has a strong balance sheet with significant liquidity and investment-grade credit ratings, although its debt levels have increased over the past decade [16] Outlook - UPS is guiding for fiscal year 2024 revenue between $92 billion and $94.5 billion, with long-term targets of $108 billion to $114 billion by 2026 [18] Valuation - UPS is currently trading below its ten-year average price to cash flow from operations, indicating an undemanding valuation [19]

The package delivery giant has laid out its medium-term goals. If it hits them, the stock at current prices will have been a great value opportunity.UPS (UPS 0.03%) management set out its targets for 2026 during its investor day event in March, and they will serve as a guidepost for investors. The question is not whether UPS will be a good value at current prices if it hits those goals, but whether it will achieve its aims. Here's what you need to know about the company's plans for the next three years.UPS ...

The sell-off in UPS has gone too far.United Parcel Service (UPS 0.06%) stock gained an impressive 83% between 2020 and the end of 2021 -- benefiting from a shift away from services and in-store shopping toward home delivery. But since the beginning of 2022, UPS is down over 35% compared to a 12% gain in the S&P 500.Here's why the high-yield dividend stock deserved to sell off but is worth buying now. A major slowdownOne look at a chart of UPS' stock price, sales, and operating margin, and it's easy to see w ...

The delivery giant's dividend looks sustainable, but there is little room for significant improvement in the coming years.Investors attracted to UPS (UPS 1.43%) stock are, no doubt, drawn at least in part by its generous 4.7% dividend yield. But how sustainable is that payout, and what are the prospects that the company will continue its 15-year run of raising its dividend per share next year? Here's the lowdown.UPS' dividend payoutUsually, when investors discuss a payout ratio, they compare dividends per s ...

The package delivery giant isn't firing on all cylinders right now, but its stock does offer a compelling dividend.United Parcel Service (UPS -2.02%) stock currently offers a compelling 4.7% dividend yield. Based on that yield, an investment of $21,276 in the stock would buy almost 157 shares that would generate roughly $1,000 in annual income in 2024. That's a pretty decent return all by itself.There's also potential for UPS' stock to appreciate if this multinational shipping & receiving and supply chain m ...

ricochet64/iStock Editorial via Getty Images Shares of UPS (NYSE:UPS) have been performing poorly since the burst of the post-COVID eCommerce bubble, and the firm has been losing market share to Amazon (AMZN) at an accelerating pace in recent times. These situations might be difficult to time, but UPS still has a solid competitive position and is exposed to ongoing tailwinds of growth in eCommerce, which appears to have mostly normalized following the last few years of volatility. I share why I think th ...

pablorebo1984/iStock Editorial via Getty Images The market has not been kind to shares of United Parcel Service, Inc. (NYSE:UPS) over the last year. Seeking Alpha Not only has UPS suffered a nearly 17% drop in share price in the last twelve months, it is also trailing its chief rival FedEx Corp. (FDX) by a wide margin. For further context as to how poorly UPS has performed, the S&P 500 Index has a total return of more than 26% during this period. There is a bright spot to the stock’s laggard performan ...

It has been about a month since the last earnings report for United Parcel Service (UPS) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is UPS due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Earnings Beat at UPS in Q1United Parcel Ser ...

The company's dividend looks sustainable, provided management hits its medium-term targets.UPS' (UPS -0.28%) current forward dividend yield of around 4.4% is highly attractive for income-seeking investors, but is the payout sustainable? The company's earnings have disappointed recently, and the dividend cover looks pretty thin in 2024. Is UPS a stock for dividend hunters to buy? Here's what you need to know before buying the stock.UPS' dividendThe company's trailing-12-month dividend cost it about $5.4 bill ...

United Parcel Service (UPS) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this package delivery service have returned +0.4%, compared to the Zacks S&P 500 composite's -0.3% change. During this period, the Zacks Transportation - Air Freight and Cargo industry, which UPS falls in, has lost 3.1%. The key question now is: What could be ...