Down 50% With a 5.9% Dividend Yield, Here's Why This Dirt Cheap Value Stock Is Worth Buying in February

Core Viewpoint - The stock of United Parcel Service (UPS) has declined 17.5% since its fourth-quarter and full-year 2024 results, now trading at its lowest level in over four years and down more than 50% from its all-time high, presenting a potential buying opportunity despite underlying business challenges [1] Financial Performance - UPS has experienced a decline in sales growth and margins post-pandemic, with forecasts for 2025 indicating $89 billion in revenue and 10.8$90.96 billion and adjusted operating margins were 10.9% [2][3] Business Strategy - UPS is focusing on its most profitable segments to counteract challenges, including an anticipated 50% reduction in delivery volumes from Amazon by the second half of 2026 [5] - The Digital Access Program (DAP) has grown significantly, reaching $3.3 billion in revenue in 2024, up 17$5.5 billion in dividend payments in 2025 [11][12] - The company targets a payout ratio of 50% of earnings, although current ratios are distorted by noncash pension expenses [13][14] Investment Considerations - Despite strategic missteps leading to a lower stock price, UPS presents a high-yield value opportunity for patient investors, with a price-to-earnings ratio of 16.4 [15][17] - The stock may be worth considering for those who believe in the company's potential for higher earnings growth through efficiency improvements and a focus on SMBs and healthcare [16]