Got $1,000? Here's Why I Would Buy UPS Over Caterpillar.
United Parcel Service is in turnaround mode, but Caterpillar is caught up in the AI hype.
Overview
I'm a dividend investor with a value bias, so I prefer to buy historically well-run companies while they are out of favor on Wall Street. Buying stocks that everybody seems to love isn't something I usually do. Which is why I would buy United Parcel Services (NYSE: UPS) over Caterpillar (NYSE: CAT) today. Here's a deeper dive into my thinking.
United Parcel Services is one of a small number of large package delivery companies. This is a capital-intensive business that requires a vast distribution network and impressive logistics skills. It would be difficult for a new competitor to simply start from scratch. For example, Amazon (NASDAQ: AMZN) has been building out its own distribution business for years, yet it still uses UPS' services.
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Originally published at www.fool.com.