1 Magnificent High-Yield Dividend Stock Down 50% to Buy and Hold Forever

Wall Street has a habit of moving between extremes, often swinging from shocking enthusiasm to despondent pessimism

UPS and its package dery peers rose dramatically, as Wall Street extrapolated temporarily rising demand out way too far into the future

When the world found a way to with COVID and opened back up again, investors dumped UPS s

That drop wasn't just COVID, however, as management also set a revamp

As UPS' cooled down, it basically added to the negativity by attempting to line and upgrade its, which required costly capital investments

It also had to deal with a new labor contract, which increased employee costs

And just when everything seemed to be evening out, UPS pre-emptively decided to reduce its exposure to its largest customer, Amazon

Image source: Getty Images

UPS is making the right long-term decisions The thing is, UPS appears to be making good choices

For example, making better use of nology so that the company can operate with fewer facilities and employees is not just a cost-saving move, but one that keeps the company current with the world around it

Amazon's is high-volume, but low-margin, and UPS is specifically attempting to focus on higher-return sectors

As far as the long term goes, people need physical things to

UPS has one of the most extensive and well-run package dery services in the world

It is highly unly that demand for quickly and efficiently moving items from one place to another will ever go away

But investors are downbeat and the stock has cratered, which has pushed the yield up to its current lofty level of 6

There are risks here that have to be considered

However, adjusted earnings rose year over year, helped along by a 20-basis-point imvement in adjusted operating margin

This is basically the outcome UPS is looking to achieve

Management is willing to accept lower revenues as it moves away from less attractive

The plan is to generate higher margins as it increases its exposure to more attractive

Assuming it can continue along this path, UPS is ly to have a solid future that includes continuing to reward dividend investors well

UPS is not for the faint of heart Still, UPS' overhaul is a risk, and Wall Street is ly saying that the risk looks high

It wouldn't be wise for conservative dividend investors to ignore the risks, and a dividend cut is a possibility

However, UPS' is getting generally stronger thanks to the revamp management has undertaken, and it is highly unly that package dery services will stop being needed

For more intrepid investors, this high-yield stock could be worth buying and holding for the long term

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

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

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