United Parcel Service, Inc. (NYSE:UPS) provides letter and package delivery, transportation, logistics, and related services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services in Europe, the Asia Pacific, Canada and Latin America, the Indian sub-continent, the Middle East, and Africa. This segment offers guaranteed time-definite express options. The company also provides international air and ocean freight forwarding, customs brokerage, distribution and post-sales, and mail and consulting services in approximately 200 countries and territories. In addition, it offers truckload brokerage services; supply chain solutions to the healthcare and life sciences industry; shipping, visibility, and billing technologies; and financial and insurance services. The company operates a fleet of approximately 121,000 package cars, vans, tractors, and motorcycles; and owns 59,000 containers that are used to transport cargo in its aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.
Along with the rest of the package delivery industry, UPS’ e-commerce business accelerated during the pandemic as shoppers took their business online. However, UPS forecast a multiyear runway in global e-commerce and began laying the groundwork to grow its services and expanded shipping routes to accommodate higher demand before the onset of the pandemic.
- MarketCap: 164.251B
- PE Ratio: 15.36
- EPS: 12.24
- Dividend Yield: 3.23%
In October 2019, UPS launched its Digital Access Program (DAP). At its core, DAP gives small and medium-sized business (SMBs) order management, fulfillment, delivery services, and logistics tools previously reserved for larger companies. UPS expected 2022 DAP revenue to top $2 billion and reaffirmed its target for SMBs to make up over 30% of U.S. volume by 2023.
UPS has done that by growing DAP and its SMB volumes, as well as by growing its healthcare business and improving its website. The strength in e-commerce and healthcare, paired with a rebound in business-to-business revenue, helped improve UPS’ operating margin. UPS tends to make more profit from these services than it does from high-volume, low-margin residential deliveries.
An investment in UPS stock is unique because it offers a blend of growth, value and income. Thus, UPS is a good long term investment for income investors looking for an e-commerce play.