On a regular day, the United Parcel Service (UPS) delivers an average of around 20 million packages. But once the holidays set in, that number spikes. For 2019, UPS forecast that it will deliver an average of 32 million packages daily during its holiday "peak season," which is a 5% jump from last year.
UPS' booming year-round business, coupled with its year-over-year holiday delivery growth, isn't just a good thing for business — it's also helped the company's stock performance. A $1,000 investment made in 2009 would be worth more than $2,800 as of Dec. 2, 2019, for a total return of around 176%, according to CNBC calculations. In the same time frame, by comparison, the S&P 500 earned a total return of around 250%.
However, while an investment in UPS would have earned you a profit, it's important to note you would have been better off buying a low-cost index fund that tracks the market, since the shares underperformed the return of the S&P 500. The current UPS share price hovers around $117.
While UPS' stock performance over the last decade couldn't match that of the S&P 500′s, any individual stock can over- or underperform, and past returns do not predict future results.
CNBC: UPS' stock as of December 2019.
Part of the reason UPS is equipped to handle these holiday increases is because it recently invested "billions of dollars" into expanding its network capacity, UPS CEO David Abney explained on a recent segment of CNBC's "Squawk Box."
In the last two years, UPS installed around 40 automated buildings for package processing and the company is now prepared to handle "more than 800,000" packages an hour, which is more than UPS could handle two years ago, Abney said.
Despite feeling prepared for the holidays, UPS has faced challenges in the past regarding its shipping practices. Back in 2015, the company was forced to pay $25 million in settlement charges after it had reportedly issued false claims to the federal government over its delivery times. According to the government, UPS allegedly did so in an effort to cover up its repeated failure to meet its guaranteed delivery times on Next Day Air Overnight packages.
More recently, UPS faced public backlash in March after 19 African American employees in Ohio filed a lawsuit against the company, in which they claimed UPS was allowing hateful, discriminatory behavior and that managers promoted racism in the workplace.
UPS' stock performance has also seen its fair share of highs and lows. In February 2017, UPS saw its largest one-day price and percentage decline in two years after it struggled to meet delivery demands during that year's online holiday shopping surge.
In May 2019, UPS saw its shares fall dramatically due to fear over escalating trade conflicts. Luckily, though, it didn't take long for its stock to be back on the mend. By the end of July 2019, the company's shares increased nearly 9% after UPS experienced better-than-expected Q2 performance and a rise in demand for quicker shipping.
Going forward, UPS plans to continue building out its network. In an effort to meet heightened consumer demand for more ways to return purchases, UPS announced in July that it will set up new "Access Points," or places where UPS users can drop off and pick up packages, at Michaels craft stores. Other retailers who have set up similar partnerships with UPS include CVS pharmacies and Advance Auto Parts stores.
Possibly the biggest change of all is that UPS will start delivering mail seven days a week starting on Jan. 1, 2020. The company has also applied for FAA approval to begin using drones for delivery "over people, at night and out of line of sight of the operator," CNBC reports.
If you are considering getting into investing, experts, including Warren Buffett, often advise starting with index funds, which hold all of the companies in an index, such as the S&P 500. Because index funds fluctuate with the market and aren't tied to the performance of a single business, they're less risky than individual stocks, making them a safer choice for beginners.
Here's a snapshot of how the markets look now.
Like this story? Subscribe to CNBC Make It on YouTube!