# UPS is taking a gamble: transforming from an Amazon agent to a high-end logistics provider

This century-old express delivery giant has recently seen its stock price drop to a five-year low, but its dividend yield has reached a historic high of 7%—is this an opportunity or a warning signal?

**Core Story**: UPS is undergoing major surgery. The three-year reform plan launched in January this year has a clear goal - to shake off Amazon as its "father," with a 21% plunge in business volume with Amazon in Q3. At the same time, it is closing 93 warehouses and focusing on high-profit small business logistics and international services. The CEO emphasized a 9.8% increase in revenue per package in Q3, indicating that it is abandoning low-end volume and targeting high-end pricing.

**Data Highlights**:
- Stock price decline: down 25% year-to-date, down 60% from the 2022 peak.
- Dividend pressure: The payout ratio is as high as 98%, leaving virtually no buffer space.
- Growth Expectations: Analysts estimate EPS growth of 4% and 11% for 2026 and 2027, respectively.

**Investors need to recognize two points**: First, the reform is only one-third complete, and short-term pain will continue; second, high dividends are both a sign of confidence and a risk—if the transformation fails, the dividends could collapse. UPS has never reduced its dividends since going public in 1999, and whether it can maintain this track record depends on its ability to successfully transition from bulk sales to premium products.

Some see this as a bottom-fishing opportunity, while others view it as a value trap. The key is the execution capability over the next two years.