United Parcel Service (UPS +1.93%) is one of the most recognizable freight and logistics companies on the planet. Chances are, you see multiple UPS trucks each week. It's an essential business, but being vital to society doesn't guarantee substantial stock gains.
UPS stock has actually been sliding in recent years. The share price is down nearly 37% over the past five years, but its 6.43% dividend yield cushions some of the blow.
While the stock may not be a great investment right now, you can still find good stock ideas by looking at what UPS delivers. The company transports millions of products to people's doors, and most of those products happen to be in Amazon (AMZN +1.70%) boxes.
UPS delivers the boxes, but you may want to invest in Amazon stock for higher returns.
Image source: Getty Images.
Amazon has more opportunities to boost its revenue
UPS' primary business is serving the freight and logistics market, which limits it in some ways. UPS doesn't have as many natural avenues for expansion into different industries. Amazon, on the other hand, has benefited from its acquisitions of companies like Whole Foods, MGM Entertainment, and Ring. Amazon also created AWS internally, and that cloud platform has been a key part of Amazon's business.
NYSE: UPS
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The e-commerce giant also generates revenue and benefits from synergies associated with its online ads and AI chip development efforts. Multiple parts of Amazon's business delivered double-digit revenue growth rates and continue to gain market share. Meanwhile, UPS reported a 4% year-over-year revenue decrease in the third quarter of 2025.
The nature of Amazon's business also allows for higher profit margins. While UPS relies on low-margin logistics, Amazon taps into high-profit business segments like cloud computing, online ads, and artificial intelligence. While its online marketplace typically has low margins, the other business segments balance it out and offer a long-term path to higher profitability.
NASDAQ: AMZN
Key Data Points
Domestic sales are still growing at Amazon
U.S. sales are a key segment for any corporation since American consumers tend to spend the most. Declining growth rates in this market make it more difficult to gain market share, which UPS is currently witnessing.
The transportation stock brought in $14.22 billion in domestic revenue during the third quarter. That represented a 2.6% year-over-year dip. UPS is tapping into international markets to boost sales, but a 5.9% growth rate in those markets was not enough to offset declining U.S. sales.
Amazon doesn't have that problem. The tech juggernaut posted 11% year-over-year sales growth in North America and 14% year-over-year international sales growth. Not only is Amazon growing in both regions, but it is also growing at a faster rate than UPS in international markets.
The two companies still work together. UPS ships many Amazon boxes to people's doorsteps. However, the two stocks are on different trajectories. Amazon looks like the more promising stock.
