UPS has an exciting long-term growth strategy, but its near-term capital allocation strategy is questionable.The two package delivery giants continue to compete intensively in the marketplace. Still, there's only one winner in terms of stock price performance over recent years, with FedEx (FDX +3.52%) stock outpacing UPS (UPS +3.16%) stock. However, I think UPS is a better long-term buy, but with one important caveat.UPS growth strategyThe company's growth strategy makes sense. Under CEO Carol Tomé, UPS has ...

Group 1 - The article discusses a strategy focused on identifying companies with strong operational performance but poor stock price performance, based on the belief that stock prices will eventually revert to the mean [1] - The "Dogs of the Dow" strategy is highlighted, which involves investing in high-yielding dividend stocks within the Dow Jones Industrial Average, capitalizing on the market's overreaction to short-term declines [2] - The article suggests enhancing the Dogs of the Dow strategy by looking for undervalued stocks outside the Dow that are experiencing an uptrend, which can lead to improved returns [4] Group 2 - United Parcel Service (UPS) is presented as an example of a company that has faced stock price declines, with a 20% drop in 2025 and a 40% decrease over the past five years, but has recently begun to trend higher [4][5] - UPS has initiated a turnaround plan called Efficiency Reimagined, which includes closing 73 facilities and reducing its reliance on Amazon, aiming to cut $3.5 billion in annual costs through investments in AI and automation [6] - The company's Q3 2025 earnings report showed revenue of $21.4 billion, a 3.7% year-over-year decrease, but diluted earnings per share exceeded analyst expectations by 34%, and operating margin improved to 10% from 7.7% earlier in the year [8]

The courier services giant needs to overcome some tough near-term challenges.UPS (UPS +0.28%), one of the world's largest shipping companies, went public in November 1999 at $50 per share. It was valued at $60.2 billion, making it the largest U.S. IPO of the 20th century.UPS joined the S&P 500 in 2002, and its stock reached a record high of 192.88 in February 2022. A $10,000 investment in its IPO would have grown to $38,576. That stable growth, along with its consistent dividend hikes, made it a reliable bl ...

The risk-versus-reward profile is vastly different for UPS and Enterprise, but in this instance, dividend lovers are the big winners.If you are a dividend lover, you'll probably find the 6.5% yield from United Parcel Service (UPS 1.05%) attractive. You'll also likely appreciate the 6.8% yield on offer from Enterprise Products Partners (EPD +0.55%). However, investors must always balance risk and reward. From an income investor's perspective, the risk-reward balance between these two investments should produ ...

Key Points UPS surged higher after a well-received earnings release in October, and has continued to climb higher throughout the holiday season. Now trading at around $100 per share, you may be wondering whether now is the time to buy. While investor optimism about UPS has been on the rise lately, concerns about its growth prospects and the sustainability of its high dividend could renew as 2026 unfolds. 10 stocks we like better than United Parcel Service › The holiday shopping season is a busy ...

Financial Data and Key Metrics Changes - In Q2, the company achieved adjusted earnings per share of $4.82, representing a 19% year-over-year increase [27] - Consolidated revenue grew by 7% year-over-year, supporting a 60 basis points adjusted margin expansion and a 17% adjusted operating income growth [27] - Adjusted operating income increased by $231 million despite headwinds from global trade policy changes and other factors [27] Business Line Data and Key Metrics Changes - FedEx Express (FEC) revenue increased by 8% year-over-year, with adjusted operating income growing by 24% and adjusted operating margin expanding by 100 basis points [9][27] - FedEx Freight revenue declined by 2%, primarily due to lower average daily shipments, with adjusted operating income decreasing by $70 million [9][27] - B2B services contributed nearly half of the revenue growth, with significant wins in healthcare and automotive sectors [22] Market Data and Key Metrics Changes - U.S. domestic package revenue grew by 12%, with strength across all services [18] - International export volumes declined, particularly on the China to U.S. lane, impacting overall performance [18] - The company shifted capacity to the Asia to Europe lane, which has a favorable B2B mix [11] Company Strategy and Development Direction - The company is on track to spin off FedEx Freight as a separately listed public company by June 1, 2026, with a strong belief in the value that will be unlocked from this separation [8] - Continued focus on high-value segments such as B2B and healthcare is expected to drive future growth [22] - The company is scaling AI adoption across its workforce to enhance operational efficiency and customer service [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate external headwinds, including the grounding of the MD-11 fleet and global trade policy changes [7][10] - The outlook for adjusted EPS has been raised to $17.80-$19, reflecting strong operational execution and ongoing efficiency initiatives [30] - Management acknowledged the challenges in the LTL market but remains optimistic about future recovery and margin improvements [28] Other Important Information - The company has closed more than 150 facilities as part of its ongoing transformation efforts [14] - A global AI program has been launched to enhance innovation and customer service [15] - The company plans to implement a fuel surcharge adjustment to mitigate costs associated with maintaining service quality [24] Q&A Session Summary Question: Dynamics of capturing incremental volume share in the domestic U.S. package business - Management confirmed they are pleased with profitable market share growth and highlighted the focus on B2B strategies and rate discipline [39][40] Question: Breakdown of B2B revenue growth and its sustainability - Management indicated that nearly half of the revenue growth was from new B2B business, share of wallet improvements, and strong performance from small business B2B [45][46] Question: Cost of service and impact of service component in annual cash incentive - Management acknowledged that while the service component adds financial headwinds, it is essential for maintaining service quality during the transformation [48][50] Question: Impact of LTL business and spin-off costs on financial outlook - Management clarified that a portion of the EBIT decline is due to market conditions, with some costs related to the spin-off preparation [53][81] Question: MD-11 aircraft return to service and associated costs - Management expects the MD-11 aircraft to return to service in Q4, with significant costs anticipated in Q3 due to peak season demands [58][60] Question: Breakdown of the $600 million headwind in the second half of the year - Management detailed that the headwind includes softness in the LTL business, costs from the MD-11 grounding, and increased variable compensation [64]

Core Viewpoint - The New York State Office of the Attorney General has filed a lawsuit against UPS, alleging the company underpaid seasonal workers by requiring off-the-clock work and manipulating timekeeping systems [1][3]. Group 1: Allegations Against UPS - The lawsuit claims UPS has a pattern of underpaying temporary workers, including driver helpers and seasonal support drivers, particularly during the holiday season [3]. - Allegations include not compensating workers for time spent traveling, watching training videos, returning undelivered packages, and handing in equipment [4]. - The complaint states UPS delayed clock-ins until the first package was scanned or delivered, automatically deducted meal breaks, and edited timesheets to reduce paid hours [5][6]. Group 2: Company Response - UPS has denied the allegations, asserting that it provides industry-leading pay and benefits to its employees in New York and complies with applicable laws [4]. - The company acknowledged awareness of the lawsuit but maintains that the claims are unfounded [3][4]. Group 3: Broader Context - In October, it was reported that UPS is increasing its use of gig delivery drivers to manage surges in package volume throughout the year, in addition to their traditional use during the holiday season [7].

Core Insights - The article highlights three ultra-high-yield dividend stocks that present attractive investment opportunities for income investors, akin to a Black Friday sale without the crowds [1] Group 1: Energy Transfer LP - Energy Transfer LP operates approximately 140,000 miles of pipeline and energy infrastructure for transporting and storing crude oil, natural gas, and natural gas liquids [3] - The company offers a distribution yield of 8.2% and aims to increase its distribution by 3% to 5% annually, supported by its strong financial position [4] - Energy Transfer's units are valued at 10.7 times forward earnings, significantly lower than the S&P 500 energy sector average of 15.7, with an enterprise value-to-EBITDA ratio of 7.7, the second-lowest among peers [5] - The company is expected to experience growth as coal-fired power plants transition to natural gas and new data centers for AI applications are developed [6] Group 2: United Parcel Service (UPS) - UPS delivers around 22.4 million packages daily across more than 200 countries and territories, making it a vital service for many Americans [7] - The company has a forward dividend yield exceeding 6.9% and has increased its dividend for 16 consecutive years, maintaining or growing it since going public 26 years ago [7] - UPS is considered attractively valued with a forward earnings multiple of 12.8 and a low EV-to-EBITDA ratio of 8.9, positioning it for higher profitability in the future [9]

Core Insights - United Parcel Service (UPS) is facing challenges despite the growing e-commerce market, with a significant 44% drop in shares over the past five years [3] - The company plans to reduce its delivery volumes for Amazon by over 50% by the second half of 2026, which may lead to downsizing and slower growth [7] Company Performance - UPS's third-quarter U.S. domestic revenue decreased by 2.6% year over year to $14.2 billion, with operating profits falling 28% to $603 million [8] - Consolidated financial results showed a 3.7% revenue decline to $21.4 billion, indicating broader struggles across its segments [8] Market Position - UPS's market share is eroding due to intensified competition, particularly from Amazon's investment in its logistics network [6] - The company's initial public offering (IPO) in 1999 was the largest at $60.2 billion, benefiting from the rise of e-commerce, but this advantage is diminishing [4][5]

Core Viewpoint - United Parcel Service (UPS) is undergoing a turnaround effort, showing early signs of improvement, making it an attractive investment opportunity despite its current challenges [1][8]. Group 1: Market Sentiment - UPS is currently viewed negatively by investors, with shares down over 50% from their peak in early 2022 due to a return to normal demand after the pandemic [2][10]. - The company has established a robust infrastructure for package delivery, which is difficult to replicate, indicating long-term value despite current market pessimism [4][5]. Group 2: Valuation Metrics - UPS's price-to-sales ratio is approximately 0.9x, significantly lower than its five-year average of 1.4x, suggesting the stock is undervalued [6]. - The price-to-earnings ratio is just under 15x, compared to a longer-term average of around 18x, further indicating a potential buying opportunity [6]. - The price-to-book value ratio stands at 5.1x, well below its five-year average of 8.5x, reinforcing the notion of attractive pricing [6][7]. Group 3: Operational Improvements - UPS management has recognized inefficiencies and is implementing a comprehensive overhaul, including exiting unprofitable business lines and investing in technology [10][11]. - Early results show positive trends, with revenue per piece in the U.S. market increasing by 5.5% in Q2 2025 and 9.8% in Q3 2025, indicating that management's efforts are beginning to yield results [11][12].