Unloved UPS Offers Surprising Value as Delivery Giant Resets

As of November 16, 2025, United Parcel Service (UPS) finds itself at a crossroads. The company's stock has seen a dramatic decline, plummeting over 50% from its peak in early 2022. This sharp drop can be attributed to the normalization of demand for shipping services after the height of the COVID-19 pandemic, when online shopping was the primary option for many consumers.

During the pandemic, investors had bid up the price of UPS shares, seemingly convinced that the surge in demand would continue indefinitely. However, as the situation returned to pre-pandemic levels, the market's sentiment shifted, and UPS shares have been deeply discounted.

Despite the market's pessimism, UPS remains a logistical powerhouse. The company has built an extensive infrastructure to move packages quickly and cost-effectively, a feat that would be challenging for competitors to replicate. Even e-commerce giant Amazon, which has developed its own delivery services, still relies on UPS for a portion of its shipments.

While UPS may have become a bit bloated, the need for package delivery services remains a necessity. The company's current valuation, with a price-to-sales ratio of 0.9x, a price-to-earnings ratio of just under 15x, and a price-to-book value ratio of 5.1x, all suggest an attractive entry point for investors willing to look past the current challenges.

The high dividend yield of 6.8% may be enticing to income-oriented investors, but the payout ratio exceeding 100% indicates that the dividend could be at risk as the company works to reset its business. In this sense, UPS is more of a turnaround story than a pure income play. If the dividend can be maintained, it would be a bonus, but the real opportunity lies in the potential for the company to streamline its operations and regain its footing in the market.