2 Reasons You Should Take a Look at This Stock Today

Getting stuff from point A to point B has been going on for a long time; there's nothing really new to the concept here. Global shipping goliath United Parcel Service (NYSE: UPS  ) has been doing a bang-up job of it for years -- since 1907, in fact, when the company was founded. Today, it's the world's largest package delivery company and in 2012 it was responsible for delivering 4.1 billion packages (16.3 million pieces per day) and brought in more than $54 billion in sales.

The chart below shows how UPS has performed over the last five years:

UPS Total Return Price data by YCharts.

Moat-ilicious
We often hear the word "moat" thrown around when we're looking at companies as potential investments. It was Warren Buffett who said: "In business, I look for economic castles protected by unbreachable 'moats.'" Simply put, a moat is a company's competitive advantage and the wider and deeper it is, the tougher it is for other competitors to infringe upon it.

As the world's largest shipper, UPS has a formidable moat in that it operates in a highly capital-intensive industry with tremendous economic and logistical barriers to entry. It would be extremely difficult for a start-up to come in and straight up disrupt this industry. So while global shipping may not be the sexiest business around, its moat certainly makes the stock look attractive.

E-commerce catalysts
I don't know about you, but I order a lot of stuff online. And that trend is only growing in my household. Today in the U.S., e-commerce is booming, yet it's still a tiny piece of the overall picture. It's something we talk about all the time, but when we think about the winners from this trend, shippers can be the ones overlooked.

Online sales grew 16% last year in the U.S. alone, yet still only accounted for about 5% of total consumer-goods sales. That number is expected to double over the coming five years thanks to companies like Amazon.com (NASDAQ: AMZN  ) and even Wal-Mart (NYSE: WMT  ) , which is focusing more resources on its e-commerce division. While it's true that Amazon's total revenue is less than 14% of  what Wal-Mart brings in each year, on the flip side of that coin Walmart's online sales of about $8 billion annually are only about 12.5% of Amazon's total sales.

Big Brown keeps gettin' it done
UPS has had a decent run of it the past five years. But when I consider the company's scale in its industry, its awesome moat and the unavoidable catalyst in e-commerce over the coming decade and beyond, Big Brown strikes me as a great holding for long-term-focused investors. With the stock trading at about 17 times forward estimates and offering up a close to 3% dividend yield, it looks like a great way to ship some profits to your portfolio for many years to come.

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While looking at 2012 performance is useful, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


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