Summer Sale
50% off Premium Yearly
Opinions Gordon Reid
United Parcel ServicesUPSDON'T BUYDec 17, 2014
Stock price when the opinion was issued
As of Jun 16, 2026. Market Open.
You might be interested:
Struggling for a long time. Capital intensive. Had to raise wages a lot. Behind the 8 ball compared to, say, AMZN (a more efficient logistics business). Competitive industry. Higher energy prices a problem, as are tariffs. One of those cases where it's fallen a lot, but that doesn't make it a good business.
You want to buy stocks when they're down. A deal at 10.5x PE with 11% growth. Don't have to jump in right now, but he'd sell puts ~$75.
Bad year, tariff uncertainty, high labour costs, elevated capex, high debt. Market didn't like reduction in business with AMZN, but it's a low-margin business. E-commerce continues to grow, looking to expand in Mexico. Thinks earnings will inflect this year. Loves the dividend of 7%.
Transport stocks in general have been weak. One of the weakest stocks in the sector. Execution problems. He's the last guy to try to pick a bottom. Yield is 7%, without huge coverage. Doesn't expect dividend cut, but doesn't inspire confidence when entire earnings go to pay the dividend. Stay away.
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium contentUnited Parcel Service, Inc. (UPS) is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. The Company offers a spectrum of the United States domestic guaranteed ground and air package transportation services. The International Package segment includes the small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, the Middle East and Africa. The Supply Chain & Freight segment includes its forwarding and logistics services, truckload freight brokerage, UPS Freight and its financial offerings through UPS Capital. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics and ground freight. Social media mentions are up 2500% in the past 24h.
A dividend pick for 2025. Is down a lot from their highs. A contrarian play. It pays around a 5% dividend yield. It trades at a reasonable valuation and offers decent earnings growth in 2025 of 5-7%. Collect the dividend and enjoy a little capital appreciation on top. You won't shoot the lights out, but you can relax with this steady earner.
There are differences between this and FedEx (FDX-N). This company is more of a ground/domestic provider. FedEx is very much skewed to air freight. They said this morning that earnings were “bad”, but thinks that what really happens in a situation like this is that expectations are built in to a level, and if they fail to hit those expectations, they are characterized as “bad”. They had good growth and this is a good company. He tends not to buy these types of companies as they move into their sweet spot of the seasonal delivery time, because that is when they get the most attention and the premium build. He would tend to stay away from companies like this at this time. FedEx is probably the company he would go to, but not at this time.