parcel

United Parcel Service (UPS 1.38%), which usually just goes by UPS, has a huge dividend yield of 7.9%. Many investors are likely attracted to it as a dividend stock, but that’s a risky call. It is more appropriate to see this package delivery giant as a turnaround stock. And if that’s how you view it, now could be the time to hit the buy button.

What UPS does is hard to do

Without getting into the logistical details, moving packages quickly and cost-effectively is very difficult. Even after huge capital investments in its own delivery service, Amazon still uses UPS. But Wall Street has a habit of going to extremes, which is a big part of why UPS could be an attractive turnaround stock.

Image source: Getty Images.

During the pandemic, package demand spiked. Investors extrapolated that demand far into the future, bidding up UPS’ stock price. Demand slowed, and UPS’ stock price crumbled when the world learned to live with COVID-19. UPS chose to start a major business overhaul as demand was returning to normal levels. The goal is to increase the use of technology to cut costs and to refocus on the company’s most profitable business lines to increase profit margins.

This is a multiyear effort with material up-front costs. And exiting low-margin business will lower sales even as it helps improve profitability. (Notably, UPS has chosen to proactively reduce its business relationship with Amazon.) Financial results have been ugly lately, which is what you’d expect. An over 97% dividend payout ratio, however, hints that most income investors should tread with caution.

However, there are positives starting to show through. For example, revenue per piece increased 5.5% in the U.S. business during the second quarter of 2025. That could be signaling that deeply out of favor UPS stock is turning a corner and is, thus, ripe for an upturn as investors get more confident in its business overhaul.

United Parcel Service (UPS -1.01%) is best known for the brown trucks that dash about most population centers in the United States. The trucks are so common that they are a fairly ubiquitous part of life, showing the importance of what UPS, as it is more commonly called, does as a business. In some ways the company’s stock could set you up for life, but there are risks to consider before you buy it.

What does UPS do?

For most people, the quick summary of UPS’ business would start and stop with the words “package delivery.” However, the background behind those two words is very important. What this industrial giant really excels at is logistics, a fact helped along by UPS’ vast scale as a business.

Image source: Getty Images.

Essentially, UPS allows customers to easily move a package from one place to another. That effort includes package pickup, package routing, and package delivery. Each step is a huge effort in its own right. Pickup, for example, can happen at a customer’s business (as other packages are being delivered), in a local drop-off box, or in one of the company’s many stores. Routing is the magic moment, as UPS uses its trucks, airplanes, and sorting facilities to make sure each item gets to where it needs to go quickly, efficiently, and cost effectively. And delivery, the part that most people are seeing when they watch those brown trucks around town, is the end of the process (and sometimes the start of a new process, if packages are being picked up).

UPS’ business is simple in some regards, but massively complex in others. In fact, it would be hard to replicate what UPS does. Even Amazon (AMZN 0.23%), after years of capital investments in its own package delivery service, still uses UPS. That shows the value of the network that UPS has developed over the decades. And it is important to keep in mind that packages will need to be delivered for as long as people live in different locations. This is not a fly-by-night business, which suggests that buying it could help set you up for life as an investor.

UPS data by YCharts

What’s wrong with UPS?

That said, UPS’ stock has fallen 60% from the highs it reached in 2022. The price is now below where it was prior to the coronavirus pandemic. These are both important facts to consider before buying UPS.

The steep drop is partly related to a massive price spike during the pandemic. Wall Street extrapolated the short-term demand boost for package delivery during the pandemic far into the future. When the world learned to live with COVID and package delivery demand cooled, so did UPS’ stock price.

The company isn’t sitting around and hoping for the best, however, it is actively working to upgrade its business. That includes spending on technology, closing older distribution centers, and shifting its customer focus to its most profitable business. For example, it recently announced that it would be materially reducing its relationship with e-commerce giant Amazon because the deliveries it makes for the company are low-margin.

The results of the company’s efforts to upgrade its business have included lower revenue and rising costs. It was unavoidable and financial results got hit not just by the receding of the pandemic, but also by management’s strategic plans for the future. Investors are worried even though the company’s attempts to upgrade its operations appear appropriate from a business perspective. If you think in decades, the downbeat view of UPS’ shares today could be a buying opportunity.

The problem comes in when you consider the dividend, noting that the dividend yield is a very enticing 7.7%. That’s high enough that it suggests dividend investors are worried about a dividend cut. That’s not an unfounded concern, despite the fact that UPS has increased its dividend annually for 16 years.

UPS Payout Ratio (TTM) data by YCharts

The dividend payout ratio is currently closing in on 100%. To be fair, it has long been in the 70% to 80% range, so the payout ratio was never low. But given the overhaul of the business, there is a very real possibility that the dividend also gets a reset. However, even if the dividend were cut by 50%, the yield would still be fairly attractive relative to the tiny 1.2% yield of the S&P 500 index (^GSPC 0.49%).

Could UPS set you up for life?

If you are looking for a reliable business that is likely to be a long-term survivor, UPS is a solid option. And once it works through its current modernization effort the business is likely to be a more profitable operation. But if you are looking for a safe dividend you might want to tread with caution. The overhaul that is in the works has pushed the payout ratio to a worrying level and a dividend reset could be in the cards. If that doesn’t bother you, noting that it seems unlikely that the dividend will be eliminated, UPS could be an attractive turnaround story to add to your portfolio.

Aug. 28 (UPI) — Mexico is temporarily suspending postal and parcel shipments to the United States, making it the latest country to halt mail delivery to the North American nation in response to President Donald Trump‘s tariffs.

Mexico’s Ministry of Foreign Affairs announced the suspension of Correos de Mexico service to the United States in a statement Wednesday. The suspension of postal and parcel shipments went into effect Wednesday and will be in place “until new operational processes are established,” it said.

“Mexico continues to dialogue with U.S. authorities as well as international postal organizations to establish mechanisms that will allow the resumption of services in an orderly manner, providing certainty to users and avoiding disruptions in the delivery of goods,” it said.

Trump signed an executive order on July 30 suspending duty-free de minimus, which is tax free entry into the United States of packages containing goods valued at $800 or less.

The American president described the measure as one aimed at closing a “catastrophic loophole” used to evade tariffs and enable drug trafficking.

The tariffs, effective Friday, will be applied to packages and parcels originating from any country.

“For this reason, Correos de Mexico, will temporarily suspend postal and parcel shipments to the United States starting August 27, 2025,” the ministry said.

Mexico adds its name to a growing list of countries no longer shipping goods to the United States, including Australia, Britain, Germany, South Korea and others.

Australia and Japan latest countries to stop some postal services to US for goods valued at less than $800.

Australia and Japan have joined a growing list of countries suspending some parcel shipments to the United States after US President Donald Trump’s administration ended an exemption that allowed packages valued at less than $800 to enter the country duty-free.

With the “de minimis” exemption set to end on Friday, Australia Post announced that it was implementing “a temporary partial suspension”.

In a statement on Tuesday, Australia Post said it was “disappointed” but the decision was necessary “due to the complex and rapidly evolving situation”.

Packages sent to the US and Puerto Rico lodged on or after Tuesday will not be accepted until further notice, the postal service said. Gifts valued at less than $100, letters and documents are unaffected by the change.

Australia Post said it would continue to work with the US and Australian authorities and international postal partners to resume services to the US soon.

Japan Post made a similar announcement on Monday, saying the suspension of some parcel shipments was necessary.

The procedures for transport and postal operators were “not clear”, which is “making implementation difficult”, Japan Post said.

Australian public broadcaster ABC said some businesses that make products in Australia have already suspended shipments, with Australian shipping software company Shippit saying it had seen a decline in shipments from Australia to the US even before the new changes came into effect.

“There’s been a 36 percent drop in volume since April in terms of outbound shipments from Australia to the US,” Shippit’s chief executive, Rob Hango-Zada, said, according to the ABC.

The announcements from Australia and Japan come after several European postal services announced similar changes last week, including Germany, Denmark, Sweden, Italy, France, Austria and the United Kingdom.

The UK’s Royal Mail said it would halt shipments to the US beginning on Tuesday to allow time for those packages to arrive before new duties kick in.

“Key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the US Customs and Border Protection will be carried out,” DHL, the largest shipping provider in Europe, said in a statement.

Since returning to the White House in January, Trump has announced a rolling wave of tariffs, or taxes paid on goods imported into the US.

The changing nature of Trump’s tariffs, which vary from country to country and are different in some cases depending on which products are being imported, has added to the confusion for postal services.

Trump had already ended the “de minimis” exemption with China and Hong Kong on May 2, closing a loophole which was widely used by fast-fashion companies Shein, Temu and others to ship duty-free.

The tax and spending bill recently signed by Trump repealed the legal basis for the “de minimis” exemption worldwide starting on July 1, 2027.

Goods shipped through the postal system will now face one of two tariffs: either an “ad valorem duty” equal to the effective tariff rate of the package’s country of origin or, for six months, a specific tariff of $80 to $200, depending on the country of origin’s tariff rate.

FAKE parcel delivery texts are the fastest growing scam of the year, according to research.

A poll of 2,000 adults also found 42 per cent have been targeted by a suspected scam in the last 12 months.

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With false social media marketplace listings and AI voice cloning scams also among the most common.

Fraudulent money requests from scammers posing as friends or family, event tickets scams and phoney financial aid services are also on the rise.

Stuart Skinner, fraud expert from NatWest, which commissioned the research, said: “Fake parcel delivery texts are the fastest-growing scam this year.

“Think about it: would a real delivery company ask you to follow a link and make a payment?

“Be wary of urgent messages or those asking for payments or to download an app – this will often contain spyware.

“Or it might be the first step for the criminals to contact you later to continue the con in a different way.”

The study also found advancements in AI are also contributing to the new forms of scams.

With AI-driven technologies such as deepfake software, automated phishing systems, chat-bots and advanced data analytics enabling scammers to create highly personalised and convincing fraudulent schemes, quickly and easily.

In fact, 86 per cent adults are concerned rapid developments in AI will give fraudsters new ways to con people – with 59 per cent worrying that identifying these scams is increasingly difficult.

Despite the growing tactics used by fraudsters, public confidence in avoiding scams has increased by 29 per cent compared to 2023.

However, two thirds are concerned that a vulnerable family member will fall victim to fraud.

Young adults aged 18-24 were the most targeted age group this year, with 55 per cent approached by scammers and nearly 60 per cent undergoing or knowing someone who experienced a financial loss.

In contrast, only 15 per cent of over 65s are aware of either themselves or someone they know losing money to a scam.

Stuart Skinner from NatWest, which has a Security Centre to help fight against fraud, added: “Are you looking at deals on social media?

“Do you really know who you’re giving your payment details to when you click through an advertisement on a social media platform?

“Double-check with your friends or family for a second opinion.

“AI voice cloning scams are a relatively new form of fraud where scammers use advanced tech to imitate someone’s voice, which can be pretty convincing.

“If you get a call that sounds like it’s from a friend or family member asking for money or personal info, take a pause.

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“Hang up and give them a call back on a number you know is legitimate.

“And remember, don’t trust the number popping up on your caller ID—scammers can fake that too.”