Core Viewpoint - UPS shares have dropped over 50% from their 2022 high, but the stock is viewed as a strong long-term investment opportunity due to its high dividend yield and potential for recovery [1]. Group 1: Reasons for Stock Decline - UPS stock experienced significant growth of nearly 150% from March 2020 to January 2022 due to increased package delivery volumes during the COVID-19 pandemic [4]. - The post-pandemic period saw a slowdown in UPS' business, compounded by challenging negotiations with the Teamsters Union, which affected profits despite avoiding a strike [5]. - UPS announced plans to cut its Amazon shipment volume by over 50% by 2026, leading to further declines in stock price, as Amazon accounted for 11.8% of UPS' total revenue in 2024 [6]. Group 2: Recovery and Growth Potential - UPS reported a 4.2% year-over-year increase in earnings for Q1 2025, indicating recovery as the higher costs from the Teamsters Union contract were front-loaded [8]. - The company is restructuring its network to cut approximately $3.5 billion in costs this year while focusing on more profitable shipment areas such as healthcare, international, B2B, and SMB markets [9][10]. - Despite uncertainties from tariffs affecting shipment volumes from China, UPS anticipates that these will be offset by increased shipments from China to non-U.S. destinations and other international routes [11]. Group 3: Investment Rationale - The demand for package deliveries is expected to grow over the next decade, supported by UPS' extensive delivery network, which provides a competitive advantage [12]. - UPS offers a forward dividend yield of 6.58%, which is attractive for generating total returns, although there is a possibility of a dividend cut [13]. - The stock is currently trading at 14.6 times forward earnings, a historically low valuation for the company, making it an appealing investment opportunity [13].