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NYSE:UPS
This summary was created by AI, based on 7 opinions in the last 12 months.
United Parcel Service (UPS) is currently facing a challenging environment marked by increased competition and rising operational costs, including higher wages and energy prices. While some experts like it due to its attractive 6-7% dividend yield and potential for earnings growth, others express concern about the sustainability of this dividend amidst a contracting global trade landscape. The company is in a transition phase focused on automation and improving efficiency, which presents a potentially rewarding risk/reward scenario. However, some analysts warn of a possible value trap, given the history of struggles and the risk that the dividend may be threatened if business conditions do not improve. Despite some bullish sentiment on growth prospects and expansion plans, a cautious stance is advised as execution issues persist.
(A Top Pick Sep 05/18, Down 5%) Has sold some of this. UPS is more resilient than FedEx. Long-term it's a great play on e-commerce--more stuff is getting delivered. It's a short-term trade now--global trade is a little off--but a long-term hold. It's the best company in this industry. Pays over a 3% dividend yield.
Would sell UPS and buy Fedex. Fedex is better managing headwinds from Amazon. They also have more areas that Amazon won' tackle. Wouldn't invest in either due to high cost in order to compete. Their current infrastructure is not ready to compete in the e-commerce world, and will eat up their free cashflow.
Longer term, it is a solid company and e-commerce will work well for them. They have to build out their business to allow direct delivery to consumers. This will eliminate their free cash flow for the next several years. Amazon is increasing competition and adding further headwinds.