Investing in Turnaround Stocks: The Case for UPS and Hormel Foods
In the ever-changing landscape of the stock market, investors constantly seek opportunities, especially among those companies that appear undervalued or are undergoing a transformation. Currently, two significant stocks to consider are United Parcel Service (UPS) and Hormel Foods (HRL). Both these companies have faced challenges but are showing promising signs of recovery that savvy investors should take note of.
United Parcel Service’s Transformation
UPS has been navigating a tough market, with its stock price declining over 55% since early 2022. However, the company has recently implemented several strategic changes that may set the stage for a turnaround. In 2025, UPS took significant steps to streamline its operations. The closure of 93 buildings and the deployment of automation across 57 locations were pivotal moves that resulted in annual savings of approximately $3.5 billion. Most notably, UPS has reduced its reliance on Amazon (AMZN), a client known for low margins despite providing high volume.
The results of these changes are starting to manifest as evidenced by a 7.1% increase in revenue per package delivered in the U.S. market. While revenue and earnings experienced a decline year-over-year, management anticipates that 2026 will be an inflection point, with improvements expected in the latter half of the year. UPS currently offers a generous dividend yield of 6.9%, making it an attractive option for long-term investors.
Hormel Foods: A Focus on Organic Growth
Similar to UPS, Hormel Foods has faced headwinds, with its stock also down over 55% since early 2022. However, the company has showcased remarkable resilience and growth potential. The fiscal year of 2025 was marked by consistent organic sales growth for Hormel, which has seen this vital metric increase for five consecutive quarters. The company is undergoing a significant transformation, including the divestment of its commodity-based turkey business and the introduction of a new CEO. These efforts are aimed at enhancing its focus on value-added products.
Looking ahead, Hormel anticipates adjusted earnings growth between 4% and 10% in fiscal 2026. The company’s shift towards a protein-centric portfolio is well-timed, as it aligns with changing consumer behaviors influenced by GLP-1 medications. With a rich history of annual dividend increases, Hormel is classified as a Dividend King, offering a yield of 5.28%, which is notably above the S&P 500’s average.
Conclusion: A Buying Opportunity
Both UPS and Hormel Foods are currently undervalued, presenting potential investment opportunities for those willing to look beyond the surface. As the market reacts to their restructuring efforts and improvement signs become more apparent, investing in these stocks could prove beneficial. For those interested in keeping up with market trends, visit Stock Market News. Additionally, consider exploring solid stock portfolio management options and retirement investments by visiting Stock Portfolio Management.
