People keep asking me about UPS. It’s always at parties, isn’t it? Someone mentions logistics, and suddenly you’re explaining why you’re cautiously, almost reluctantly, optimistic about a company that mostly delivers things you didn’t really need in the first place. It feels a bit like defending a habit, like explaining why you still collect porcelain thimbles. I’m not saying it’s a good investment, just…less bad than some. My brother-in-law, Barry, he’s a crypto enthusiast, naturally. He thinks I’m ancient. He doesn’t understand the quiet dignity of a moderately performing stock.
The thing is, UPS is down, yes. Double-digit percentage down, which is roughly the same number of sweaters my mother insists I donate every spring. Meanwhile, the S&P 500 is soaring. It’s infuriatingly buoyant. It feels like everyone else got the memo about a good time, and I’m stuck auditing the receipts. And they’re paying out more in dividends than they’re actually earning. Which, if you’re a person who likes things to make sense, is deeply unsettling. It’s like your aunt sending you a fruitcake and then asking for a loan.
But then you look closer. And by “closer,” I mean I spent an entire Sunday reading quarterly reports, which is how I spend most of my Sundays, and you notice a sort of…beige resilience. Shares have bumped up a bit, over 25% in the last three months. Which, let’s be honest, isn’t exactly a fireworks display, but it’s not a total collapse either. It’s the kind of progress that makes you slightly less anxious about retirement. And their last quarter wasn’t horrible. It was…adequate. Like a perfectly serviceable pair of khakis.
I’m leaning toward cautiously optimistic, mostly because I’m terrified of being wrong. Here are a few reasons, and I’m saying this with the full understanding that the market is a capricious beast, and could, at any moment, decide to punish me for my mild hope.
1. The Art of Un-Revenue
They’re shrinking, deliberately. Revenue is down, 3.7%. It sounds awful, doesn’t it? Like a failing marriage. But it turns out they sold a chunk of themselves – Coyote Logistics. Apparently, it was dragging them down. It’s like deciding to get rid of that one friend who always has a crisis during your vacation. They’re also letting Amazon handle more of its own deliveries. Which, frankly, feels a bit like a breakup. “It’s not you, it’s me,” says UPS. “We need space to grow.”
The CEO, Carol Tomé, mentioned something about “revenue quality.” It sounds so…clinical. Like they’re grading their income. Apparently, they’re getting more money for each package. 9.8% more, in fact. They’re also acquiring Andleuer Healthcare Group, which sounds like a pharmaceutical company, but is actually a logistics firm specializing in, you guessed it, healthcare. They want to be the best at shipping…medicine? It feels oddly specific. Like a very focused ambition.
2. The Network Purge
They’re dismantling their entire delivery network. It’s…dramatic. They’ve closed 93 buildings, which is a lot of buildings. And they’ve encouraged a bunch of drivers to retire. Voluntarily, they say. But I suspect there was a subtle nudge involved. It’s like Marie Kondo-ing an entire corporation. “Does this warehouse spark joy?” Apparently not. They’re aiming for $3.5 billion in cost savings. Which sounds impressive, until you remember how much everything costs these days.
Their operating margin went up by a tiny fraction, 10 basis points. It’s almost not worth mentioning. But it’s something. And I’m clinging to these small victories like a life raft. I suspect their profitability will inch upwards. And maybe, just maybe, they’ll be able to keep paying those dividends. It’s a low bar, I admit, but I’m not asking for miracles.
3. The Tariff Tango
The tariffs were a mess. Volumes dropped in the good lanes (China to the US) and surged in the bad ones. It was like trying to navigate a crowded dance floor with your eyes closed. But apparently, things are…calming down. Not gone, mind you. Just…less chaotic. Tomé says the uncertainty is “somewhat resolved.” Which is corporate-speak for “we’re still bracing for impact.”
Small businesses might still feel the pinch, she admits. Which is a polite way of saying “we’re passing the buck.” But overall, the worst seems to be over. And UPS, in its infinite wisdom, is positioning itself as the solution. They’re deploying AI to handle customs brokerage. They’re removing friction, as Tomé puts it. It sounds…grandiose. But maybe, just maybe, they’re onto something. They’re not just shipping boxes; they’re facilitating global commerce. It’s a heavy burden, but someone has to carry it.
So, is UPS a good investment? I honestly don’t know. But it’s not the worst. It’s…beige. And sometimes, beige is exactly what you need. A quiet, unassuming stability in a world that’s constantly trying to explode.
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2026-01-21 12:54