United Parcel Service (UPS) made headlines after it announced plans to cut 20,000 jobs, which is about 4% of its workforce, and close more than 70 facilities. The company is doing this to cut costs as it deals with fewer shipments from Amazon (AMZN) and new tariffs. Investors are hopeful the company will become more efficient and profitable as a result of these changes.

This shake-up comes at a time when the logistics industry is changing fast. Experts expect global parcel shipping to grow at an annual rate of 59%, reaching 256 billion parcels by 2027, and the whole logistics sector could hit $14.08 trillion by 2028. 

As UPS adjusts to workforce changes and a new trade landscape, the big question is whether its high dividend and strong market position are enough to make the stock a smart buy. Let’s dive in.

How UPS’s Finances Stack Up After the Layoffs

United Parcel Service (UPS) is the biggest package delivery company in the world, making sure millions of packages get to people and businesses every day. Despite its widespread presence, the past year has been challenging for UPS stock.

Shares have dropped about 35% over the past 52 weeks and are down 24% so far this year, as investors worry about slower growth and tighter profit margins.

Looking at its latest quarterly numbers, UPS brought in $21.5 billion in revenue in the first quarter of 2025, flat with the same period last year. On the bright side, operating profit increased by 3.3% to $1.7 billion, and adjusted earnings per share rose 4.2% to $1.49. 

When it comes to value, UPS is trading at a forward price-earnings ratio of about 12.7x, which is lower than the sector average of 17.6x. This shows that investors are still cautious about UPS’s near-term growth, even though the company is paying out a strong dividend and working hard to become more efficient.

UPS’ Growth Engines

UPS is making some big moves to change how it does business in the future. One step in its shakeup is its decision to buy Andlauer Healthcare Group for about $1.6 billion. 

This deal brings in new skills for handling temperature-controlled healthcare shipments in North America, which is becoming more important as demand grows. UPS has also finished buying Frigo-Trans and BPL in Europe, which help handle everything from super-cold storage at -196°C to regular room temperature shipping. 

These changes mean UPS can now offer even more options for customers who need their healthcare products delivered safely and on time.

For potential investors, shares come with an outstanding dividend. UPS’s dividend yield is 6.8%, much higher than the industry average of 2.36%. The company has raised its dividend for 16 years. 

The payout ratio is 81.7%, which shows UPS is giving most of its profits back to shareholders. This is great for investors who want steady income, but it also means UPS is counting on new business changes to keep the money coming in.

Is UPS a Buy After the Shake-Up?

UPS is playing it safe with its outlook this year, which makes sense given all the changes happening in the company. The company forecasts lower revenue in its domestic and international businesses.

Even with this cautious approach, analysts aren’t giving up on UPS. The 28 analysts in coverage rate it a consensus “moderate Buy,” showing they still believe in the company’s long-term potential. The average price target is $118.03, which implies more than 20% upside potential. 

Conclusion

UPS is clearly in the midst of a major overhaul, cutting costs and betting big on healthcare logistics, all while keeping its dividend among the highest in the sector. The stock’s been beaten down, but analysts see real upside from here. 

For income seekers, that yield is tempting. For everyone else, UPS looks like a turnaround story in progress. It is worth a look, but not without a dose of patience.