1 Magnificent High-Yield Stock Down 38% to Buy and Hold Forever

In the ever-evolving world of investing, it's crucial to stay vigilant for opportunities that offer a compelling combination of value and growth potential. One such opportunity presents itself in the form of United Parcel Service (UPS), a high-yield stock that has experienced a significant decline in recent years but remains an attractive long-term investment.

UPS, a global leader in logistics and supply chain management, has been navigating a challenging period following the pandemic-era business boom. However, the company's recent results suggest a turnaround is underway, making it an enticing prospect for investors seeking a high-yield dividend stock with long-term growth potential.

An improved outlook for 2025, driven by a recovering average daily volume and price hikes, has positioned UPS for a strong rebound. The company's third-quarter results demonstrated both revenue and profit growth, with a 5.6% increase in revenue and a 12.1% increase in adjusted EPS. This performance, coupled with UPS's strategic focus on value-added services and expansion into emerging markets, bodes well for the company's long-term prospects.



UPS's dividend growth history is impressive, with a 15-year streak of annual increases. Its 5% yield is higher than the S&P 500 average and many other high-yield stocks. Analysts expect UPS to grow earnings by 17% in 2025, supporting a 4.3% revenue growth rate and a sustainable dividend.

Key factors driving UPS's long-term growth and dividend sustainability include its extensive global logistics network, which handles over 22 million packages daily across 200 countries. This network is difficult to replicate, ensuring UPS's relevance in the growing global economy. Additionally, UPS is navigating a challenging period, but recent results show revenue and profit growth, with a 5.6% increase in revenue and a 12.1% increase in adjusted EPS in Q3 2024. The company is targeting value-added services and expanding into emerging markets, with Wall Street consensus estimates forecasting 4.3% annual revenue growth and a 17% increase in EPS in 2025. UPS's dividend sustainability is supported by its solid fundamentals, underlying profitability, and significant free cash flow, with a 15-year history of dividend increases. The current 5% dividend yield is compelling, and UPS's turnaround story makes it an attractive long-term investment.

In conclusion, UPS's recent turnaround, driven by strategic initiatives and a recovering market, positions the company as a strong candidate for long-term investment. With a high-yield dividend, impressive growth prospects, and a solid foundation in the global logistics industry, UPS is a stock worth buying and holding for the long term.