UPS just finished the full Covid rollercoaster. From pandemic lows to stimulus highs and then right back down. The stock has plunged 52% from its 2022 peak. It now trades at all-time lows compared to FedEx. The dividend is nearly 8 percent. That is not a bargain. It is a flashing red warning.
UPS cut 20,000 jobs. Shut 73 facilities. Dumped Amazon, its biggest customer, because the margins were garbage. Now it is chasing “high-margin” freight. Revenue is flat. Profits are shrinking. Cash burn is speeding up. The company is bleeding cash while pretending to turn things around.
“UPS reported mixed Q2 results. U.S. domestic revenue slipped 0.8 percent. Supply Chain Solutions down 18.3 percent. Company declined to offer full-year guidance citing macro uncertainty.” https://qz.com/ups-q2-2025-earnings-pivot
That dividend jump is not a sign of strength. It is a distress flare. UPS is paying investors to stay while the business struggles. This is compensation for risk, not confidence in the future.
“Shares made a new lower low. Next support is not until the 70 dollar area, levels not seen since the March 2020 Covid meltdown.” https://www.siacharts.com/2025/08/08/united-parcel-service-inc-ups-6/
The chart is broken. Lower highs and lower lows dominate. Candles are bleeding red. Volume is rising. There is no support until 70 dollars. This is not technical noise. It is a warning sign of serious trouble ahead.
UPS is a value trap, not a value buy. The platform flagged it months ago. Money dried up well before earnings hit. Investors are running for the exits.
“Capital preservation and avoiding portfolio destruction are important concepts. Value buys may in fact be value traps and the shares may continue to fall further in price which is in fact what has occurred here.” https://www.siacharts.com/2025/08/08/united-parcel-service-inc-ups-6/
Forecasts predict more pain. August closes at 79.84 dollars. October drops to 62.65 dollars. By year-end the price will sink below 70 dollars. This is not a dip. This is a full descent.
“United Parcel Service stock price forecast for October 2025. The forecast for beginning 73.70 dollars. Maximum price 73.70, minimum 57.64. Averaged United Parcel Service stock price for the month 66.92. At the end 62.65 dollars, change for October minus 15.0 percent.” https://longforecast.com/ups-stock
FedEx is eating UPS’s lunch. UPS is shrinking its network. FedEx is expanding its margins and gaining market share. The relative chart flipped. UPS now trades at a historic discount to FedEx.
Heisenberg calls it a no brainer. But if the dividend is 8 percent, something is broken deep inside. Otherwise, Microsoft would be doing the same thing.
UPS is not just struggling. It is facing a brutal reality check. Investors should beware before jumping on what looks like a bargain. This dividend is paying you to wait for the disaster to unfold.