<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>United Parcel Service has been dramatically overhauling its business.</li><li>The stock is still down 55% from its 2022 highs.</li><li>10 stocks we like better than United Parcel Service ›</li></ul>Shares of United Parcel Service (NYSE: UPS) have recently pulled back after a rally in late 2025. It remains below its 2022 highs by a whopping 55%. And yet, the company is making material progress in its efforts to become a leaner and more profitable business. Here's why you might want to buy the dip.<h2>What does UPS do?</h2>United Parcel Service delivers packages. It is a highly capital-intensive business, and the industry has changed dramatically in recent years. UPS has been making big changes to adjust to the times, as it looks to slim down and focus on its most profitable business. That process has required investing in technology and infrastructure while simultaneously reducing staff and selling outdated or unneeded infrastructure. There are big upfront costs involved with these changes.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg1ODgyNS8yNF8xMF8yNC1mb3VyLWhhbmRzLWhvbGRpbmctcHV6emxlLXBpZWNlcy10b2dldGhlci1fbWYtZGxvYWQtZ2V0dHlpbWFnZXMtMTA3Nzk4ODgwNi0xMTk5eDgwMC1jZmMxZTk0LmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="467" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg1ODgyNS8yNF8xMF8yNC1mb3VyLWhhbmRzLWhvbGRpbmctcHV6emxlLXBpZWNlcy10b2dldGhlci1fbWYtZGxvYWQtZ2V0dHlpbWFnZXMtMTA3Nzk4ODgwNi0xMTk5eDgwMC1jZmMxZTk0LmpwZyZ3PTcwMA"/>Image source: Getty Images. UPS has also been purposefully adjusting its customer relationships. On the positive side, it has been leaning into sectors like healthcare, which have high margins. On the negative side, the company has been trimming its business with high-volume customers that provide it with only low-margin business. The biggest change was the company's pre-emptive move to reduce the number of packages it handles for Amazon (NASDAQ: AMZN). These changes support margins but reduce the company's top line.<h2>You have to dig below the surface to see the positives at UPS</h2>As UPS puts all the pieces together for a business turnaround, the big picture is actually kind of ugly. Higher costs and lower revenue aren't a great story. Not surprisingly, the company's financial statements haven't been pleasant reading. And yet, there are green shoots starting to appear.For example, the revenue per piece in the United States has been growing (up 8.3% in the fourth quarter of 2025) even as the revenue in the U.S. segment has been falling (down 3.2%). That is exactly what you would expect to see given the company's goals and the steps it has taken and it is the continuation of what amounts to a positive trend.<h2>The inflection point is just ahead, according to UPS</h2>The company hasn't yet turned the corner, but management believes that will happen in the second half of 2026. That means that right now could be a good time to buy the stock, ahead of the point where the company's business starts to show more outward signs of a return to growth. The one caveat is the 6.4% dividend yield. The company is indicating the dividend is safe in 2026, but the payout ratio is hovering around 100%. Dividend investors might want to tread with caution.<h2>Should you buy stock in United Parcel Service right now?</h2> Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $522,791!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,132,678!* Now, it’s worth noting Stock Advisor’s total average return is 952% — a market-crushing outperformance compared to 191% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of March 11, 2026. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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United Parcel Service (UPS) stock has dropped 55% from its 2022 highs, despite the company making significant changes to improve profitability. UPS is focusing on high-margin sectors like healthcare while reducing reliance on low-margin customers, including Amazon. Although revenue per package is increasing, overall revenue is declining. Management anticipates a turnaround in the second half of 2026, suggesting it may be a good time to buy the stock. However, caution is advised due to a high dividend payout ratio and the recommendation of other stocks over UPS by analysts.

Time to Buy the Dip on United Parcel Service Stock?