- I think UPS is a fine company, and as I demonstrated earlier, I think the dividend is well covered.
- The problem is that investors access dividends via stocks, and stocks are often very volatile. Someone who buys at peak valuation receives a much worse return.
- The shares haven't been this expensive on a PE basis for at least five years, and the last time they approached the current valuation, the shares went on to underperform.
- My history with short puts on UPS demonstrates a weakness with my short put strategy that I think investors should be mindful of.
For further details see:
UPS Demonstrates How Capricious The market Has Become