1 Magnificent Industrial Stock Down 58% to Buy and Hold Forever

It's been a tough few years for United Parcel Service (NYSE: UPS), or UPS for short. Shares of the parcel delivery company have lost more than half their value since their 2022 peak amid a fallout with Amazon and the companywide transformation that followed.

Investing in turnaround stories can be tricky because there's always the risk that things just don't work out as hoped, and even if you're ultimately proved right, buying too soon could mean years of disappointment. So, why is UPS a magnificent industrial stock you might want to buy now?

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The company's transformation looks ready to deliver results

It can be scary to lose a customer like Amazon, which ultimately moved most of its delivery logistics in-house. However, it seems likely for the best. Amazon reportedly accounted for 20% to 25% of UPS' package volume but only about 12% of its total revenue.

The company has been scaling down its Amazon business and restructuring along the way. It reduced its Amazon volume by 1 million packages per day in 2025 and will drop another 1 million per day by mid-2026. UPS has been downsizing to cut costs and adjust to lower volume.

Once it finishes this off-ramp process, management expects volumes to increase over the latter half of 2026, enabling full-year revenue to come in flat against last year and setting the stage for growth. Wall Street analysts anticipate earnings per share increasing by an average of almost 9% annually over the next three to five years.

Multiple reasons to consider buying UPS right as it nears this inflection point

For starters, the company's struggles have made the stock arguably a bargain at its current price. Shares trade at less than 14 times their forward earnings estimate, which will likely seem cheap in hindsight if the business grows as analysts expect. And the stock's decline has ratcheted up the dividend yield to 6.75%.

That said, UPS is paying out virtually all of its earnings for that dividend, so it's fair to wonder whether it's sustainable. If management can keep up the payout, earnings growth should alleviate the pressure over the next few years. Even if the company slashed the dividend in half, it would still be more than 3% with high-single-digit earnings growth, potentially driving double-digit total investment returns per year.

UPS simply needs to follow through on its turnaround strategy to deliver strong results for shareholders from these levels. On top of that, there is considerable upside if things do go well, because stronger business performance would likely lift the stock's valuation, turbocharging the returns already coming from the dividend and earnings growth.

As one of the leading delivery and logistics companies in an increasingly digital economy, UPS might be a winning stock pick, especially for investors who buy and hold fantastic companies for as long as possible.

Justin Pope 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.