Should I Buy UPS (UPS)? Finance YouTuber Analysis

The YouTuber states he has no interest in UPS, despite acknowledging its vital role in e-commerce and its status as a dividend player. He notes the company has business problems, including debt, and while not a bankruptcy risk, it's not a sector he personally wants to invest in.

“For me, it's definitely one I don't have any interest in that particular line of business, so I'll be staying away from UPS regardless of what happens there.” — ▶ Watch clip

The YouTuber holds a small position in UPS, acknowledging its current challenges like squeezed margins and a high dividend payout ratio (97%). While it's a market leader trading at a low P/E compared to its historical average, he expresses caution due to the risk of a dividend cut and potential for the stock to remain flat for years. He views it as a tactical position with potential upside but also significant risks.

“Yo personalmente tengo una pequeña posición con ella. No me siento 100% a gusto. Hm, la verdad es que desde que la compré han saliendo han salido noticias peores, pero también confío en en su recuperación.” — ▶ Watch clip

The analyst suggests buying UPS for its long-term essential service in e-commerce delivery, despite competition from Amazon. He anticipates growth from smaller businesses like Shopify stores relying on UPS for shipping, and views its infrastructure as crucial for future delivery needs, making its over 5% dividend yield a phenomenal long-term payout.

“I think UPS is one of those essential services that we're going to be using for a very long time a little bit like Wireless services and with a dividend yield over 5% I think that's going to be a phenomenal payout to buy and hold long term.” — ▶ Watch clip

UPS is presented as a turnaround story, currently trading at its fair value after a significant correction from its pandemic highs. While facing challenges like rising labor costs and overcapacity from the e-commerce boom, the company is implementing new services and automation to improve margins. If the turnaround is successful, analysts project strong earnings growth and significant annual returns.

“Ich würde auch ja ich gehe mal bis hierhin wo die 16 Analysten das ganze noch abschätzen hätten wir eine Renditeerwartung von 19% aufs Jahr ich habe das nicht korrigiert irgendwie das KGV weil wenn wir uns mal hier die Wachstumsraten Ansehen von prognostizierten nachdem nachdem wir den turnun Schaffen von 15 bis 18% da ist ein KGV von 17 durchaus gerechtfertigt wir haben schon mal Zeiten gehabt in denen der Gewinn ähnlich stark gestiegen ist j Malal sogar 20% beispielsweise das ja genau das wäre jetzt die dividendenaktie mit Rabatt.” — ▶ 27:00