In this article, we will explore the 7 best delivery stocks to invest in now.
An Overview of the Delivery and Courier Industry
The delivery and courier industry is diverse, encompassing a wide range of services that connect businesses and consumers through various shipping methods. Parcel delivery services are a major component, with companies offering both domestic and international shipping options, driven by the rise of e-commerce.
Another significant segment is food delivery platforms. These platforms connect hungry customers with local eateries, creating a new business model that thrives on convenience. Overall, the delivery industry is evolving rapidly, with diverse players working to meet the growing expectations for speed and reliability in shipping services.
According to Zion Market Research, the global on-demand delivery market was valued at $15.19 billion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 20.90% during 2024-2032 to reach $83.82 billion by the end of the forecast period. In 2023, the Asia-Pacific region led the market in revenue and is projected to maintain its dominance throughout the forecast period.
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This growth is fueled by increasing consumer expectations for fast and reliable delivery services, particularly same-day and next-day options. Experts highlight that the demand for quick deliveries has led to substantial investments in last-mile delivery solutions and advanced technologies, such as automation and artificial intelligence (AI).
In 2024, consumers have continued to prioritize free and fast shipping for their online orders, according to recent data from Digital Commerce 360 and Bizrate Insights. A survey of 1,013 online shoppers revealed that 81.34% consider free shipping their top priority when receiving deliveries. Fast shipping follows closely, with 68.41% of respondents highlighting its importance. Additionally, 55.68% of consumers emphasized the need for retailers to keep products in stock and ready to ship.
AI and automation are key trends that are significantly transforming the delivery services industry, making operations more efficient and responsive to consumer demands. For example, companies like DHL Express have introduced the DHLBot in Singapore and South Korea. The DHLBot is an AI-powered robotics arm that can sort over 1,000 small parcels per hour with 99% accuracy. This technology not only speeds up the sorting process but also reduces labor costs and minimizes errors, allowing for quicker deliveries.
As the industry evolves, it is clear that AI and automation will play a crucial role in shaping the future of delivery services.
With an understanding of the current trends in the delivery services market, let’s take a look at the best delivery stocks to invest in now.
A delivery truck on a city street, boxes of online orders stacked in the back.
Methodology
To compile our list of the 7 best delivery stocks to invest in now, we used the Finviz and Yahoo stock screeners to find the largest delivery companies. We also reviewed our own rankings and consulted various online resources. From an initial pool of more than 20 delivery stocks, we focused on the top 7 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 7 best delivery stocks to invest in now are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
7 Best Delivery Stocks To Invest In Now
7. Old Dominion Freight Line Inc. (NASDAQ:ODFL)
Number of Hedge Fund Holders: 43
Old Dominion Freight Line Inc. (NASDAQ:ODFL) is a delivery company that specializes in less-than-truckload (LTL) freight shipping. The company provides regional, inter-regional, and national shipping and transportation services. As one of the largest LTL carriers in North America, Old Dominion also maintains strategic alliances with other carriers to provide transportation services throughout the region.
In the second quarter of 2024, Old Dominion Freight Line Inc. (NASDAQ:ODFL) reported strong financial results, achieving a 6.1% year-over-year increase in revenue, primarily driven by a 4.4% rise in LTL revenue. This marks the third consecutive quarter of growth in both revenue and earnings per share, with earnings increasing by 11.3% year-over-year to reach $1.48 per share. The company attributes its success to a long-term strategic plan focused on providing superior service at competitive prices, which has helped strengthen customer relationships and support its yield-management strategy.
The company is also making significant investments in its operations, with capital expenditures totaling $238.1 million in the second quarter alone. Old Dominion Freight Line Inc. (NASDAQ:ODFL) plans to invest approximately $750 million throughout 2024 for projects that include expanding service centers and upgrading technology.
In the first half of the year, Old Dominion Freight Line Inc. (NASDAQ:ODFL) utilized $637.1 million of cash for its share repurchase program and paid out $112.6 million in cash dividends to its shareholders, reflecting its commitment to returning value to investors.
Over the past 10 years, Old Dominion Freight Line Inc. (NASDAQ:ODFL) has grown its revenue at a compound annual growth rate (CAGR) of 8.95%, while its net income has increased at a CAGR of 18.85% during the same period.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 43 hedge funds held stakes in ODFL. Weitz Investment Management stated the following regarding Old Dominion Freight Line Inc. (NASDAQ:ODFL) in its “Partners III Opportunity Fund” second-quarter 2024 investor letter:
“We purchased a new position in Old Dominion Freight Line Inc. (NASDAQ:ODFL), one of the largest providers of “less than truckload” (LTL) trucking services. ODFL has long been regarded as the highest-quality LTL operator by customers, employees/drivers, and owners alike, with the profit margins and balance sheet strength to prove it. Similar to IDEX, we are not attempting to “call the bottom” of the recent downturn in industry freight volumes. Instead, we note ODFL’s long track record of successful investing through cycles to better position and grow their logistics network, resulting in better service for customers and market share growth.”
6. United Parcel Service Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 44
United Parcel Service Inc. (NYSE:UPS) is one of the world’s largest package delivery companies and a leading provider of global supply chain management solutions. With one of the largest airlines and fleets of alternative fuel vehicles, UPS delivers millions of packages every business day to customers in over 200 countries and territories. In 2023, the company successfully delivered an average of 22.3 million packages daily, totaling 5.7 billion packages for the year.
The company is making significant strides in its growth strategy. In July, United Parcel Service Inc. (NYSE:UPS) announced plans to acquire Estafeta, a leading small package provider in Mexico. This acquisition will enhance UPS’s logistics capabilities and provide customers with better access to global markets, especially as many businesses are shifting their manufacturing closer to the United States.
In addition to the acquisition, UPS was recently awarded a significant air cargo contract by the United States Postal Service (USPS). The company is onboarding the new air cargo business, which is expected to be fully implemented before the peak shipping season, making UPS the primary air cargo provider to USPS.
In the second quarter of 2024, United Parcel Service Inc. (NYSE:UPS) reported consolidated revenue of $21.8 billion, reflecting a slight decline of 1.1% compared to the previous year. Although the company missed earnings expectations, it is actively pursuing strategic initiatives aimed at improving operational efficiency and driving future growth. A key part of this strategy is the “Network of the Future” initiative, which focuses on optimizing and automating its core integrated network to lower costs.
As part of this initiative, UPS has already completed 35 operational closures in the first half of 2024, with plans for additional closures in the second half. United Parcel Service Inc. (NYSE:UPS) is automating various tasks, including the dispatch process for package cars and feeder trucks. These efforts have led to a 26% reduction in staffing so far this year.
These efforts are designed to streamline operations and enhance productivity, positioning UPS for better performance in a challenging market environment.
In the Q2 2024 earnings call, the company’s management announced plans to achieve approximately $1 billion in savings by the end of the year through various strategic initiatives. United Parcel Service Inc. (NYSE:UPS) also announced that it has entered into an agreement to sell its Coyote Logistics business unit to RXO, which is expected to free up cash that was not included in the original guidance. This sale will allow UPS to restart its share repurchase program, with plans to buy back about $1 billion in shares annually, including roughly $500 million in 2024.
These efforts reflect the company’s commitment to enhancing its financial flexibility and focusing on its core business operations.
As of the second quarter of 2024, UPS was held by 44 hedge funds, according to Insider Monkey’s database.
Artisan Partners stated the following regarding United Parcel Service Inc. (NYSE:UPS) in its “Artisan Value Fund” first quarter 2024 investor letter:
“United Parcel Service Inc. (NYSE:UPS) was a Q4 2023 purchase. When we initiated our position, shares were under pressure due to concerns about its new labor contract diverting volumes and driving up costs, as well as the continued normalization of volumes following COVID-related gains. The stock moved higher after we purchased it but gave up those gains in January when the company reported weaker-than-expected shipping volumes and a decline in revenue in the prior quarter. Despite the long-term growth tailwinds from the secular shift toward e-commerce, the shipping business is still cyclical, so disappointments will happen. However, we welcomed the market’s short-term focus as it provided us an opportunity to purchase UPS at an undemanding valuation of less than 11X our view of normalized earnings. UPS is a good transport operation that easily earns its cost of capital, generates significant free cash, has a wide economic moat, has a strong financial profile and pays an attractive dividend yielding 4%. With the new 5-year labor agreement completed, we believe UPS can focus on regaining lost volume and improving its cost structure.”
5. Maplebear Inc. (NASDAQ:CART)
Number of Hedge Fund Holders: 56
Maplebear Inc. (NASDAQ:CART), doing business as Instacart, is an American delivery company that facilitates online grocery shopping, delivery, and pickup services in the United States and Canada. The company partners with over 1,500 retailers across North America, allowing customers to shop from more than 85,000 stores on the Instacart Marketplace.
Maplebear Inc. (NASDAQ:CART) is actively enhancing its services and technology to improve the shopping experience for customers. In 2023, the company completely revamped its white-label e-commerce storefront solution, allowing enterprise partners to access new features and technologies. This shared architecture benefits both Instacart and its partners, making online grocery shopping more efficient. So far this year, Instacart has launched e-commerce storefronts for more than 30 new retailers, including regional favorites like Bi-Rite and Coborn’s.
Additionally, the company has introduced the Caper Cart, an AI-powered smart cart that simplifies the checkout process and offers personalized recommendations to shoppers. Recently, Maplebear Inc. (NASDAQ:CART) launched Caper Carts internationally in partnership with ALDI in Austria, showcasing its commitment to innovation. With plans to expand its technology and services further, Instacart is focused on creating a seamless shopping experience that connects online and in-store shopping.
In the second quarter of 2024, Maplebear Inc. (NASDAQ:CART) showed strong financial performance with a Gross Transaction Value (GTV) of $8.2 billion, reflecting a 10% increase compared to the same quarter in the previous year. The company processed 70.8 million orders, which is a 7% rise year-over-year. Total revenue reached $823 million, marking a 15% growth from the same period last year and representing 10% of the GTV. These positive results highlight the company’s ability to expand its business and meet growing consumer demand for grocery delivery services.
According to Insider Monkey’s database, 56 hedge funds held stakes in Maplebear Inc. (NASDAQ:CART) in the second quarter of 2024. This brings CART to the 5th spot on our list of the best delivery stocks to invest in.
4. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 59
FedEx Corporation (NYSE:FDX) is a global provider of transportation and logistics services. Serving over 220 countries and territories, the company operates a vast network that includes express delivery, ground shipping, freight services, and e-commerce solutions.
FedEx offers a wide range of delivery services to meet various shipping needs. The company has an impressive infrastructure that includes one of the largest air cargo fleets in the world, which is crucial for efficient parcel delivery and logistics management.
Recently, FedEx Corporation (NYSE:FDX) announced its earnings for the first quarter of its fiscal year 2025, which fell short of expectations for both revenue and earnings per share (EPS). However, the company remains focused on improving its profitability through its DRIVE program, aiming to save $4 billion by the fiscal year 2025. In the first quarter alone, the company achieved significant savings of $390 million from this initiative, demonstrating its effectiveness in cutting costs.
The company has a substantial capital expenditure plan of $5.2 billion for FY 2025. This investment is directed toward high-return areas within its business, showing a commitment to long-term growth. As of August 31, FedEx Corporation (NYSE:FDX) has $5.9 billion in cash on hand and a strong balance sheet. This positions the company well to navigate challenges and invest in future opportunities.
FedEx Corporation (NYSE:FDX) successfully completed $1 billion in stock repurchases during the first quarter and plans to buy back an additional $1 billion in the second quarter. This strategy reflects the company’s confidence in its long-term growth and commitment to returning value to its shareholders.
Analysts are also bullish on FDX. Analysts currently hold a consensus buy rating on the stock and the 1-year median price target of $314.50 set by analysts indicates a potential upside of 14% from current levels.
According to Insider Monkey’s Q2 2024 database of over 900 hedge funds, 59 hedge funds held stakes in FedEx Corporation (NYSE:FDX).
3. DoorDash Inc. (NASDAQ:DASH)
Number of Hedge Fund Holders: 67
DoorDash Inc. (NASDAQ:DASH) is a technology company that primarily provides restaurant food delivery services. Operating in more than 30 countries across the globe, DoorDash connects consumers with thousands of restaurants, convenience stores, pet stores, grocery stores, and more. It is the largest food delivery platform in the US.
Additionally, the company offers a convenient service called Package Pickup, allowing customers to request a Dasher to collect their prepaid packages from home and deliver them to local carriers like UPS, FedEx, and USPS.
DoorDash Inc. (NASDAQ:DASH) is focused on expanding its marketplace and enhancing local commerce in the US by adding tens of thousands of new merchants across diverse categories like groceries, beauty products, alcohol, sporting goods, and home improvement. In Q2 2024, the company introduced features that improve personalization and streamline the ordering process, which helped drive a significant increase in monthly active users in the US.
Over the past 2 years, the company has expanded its international operations to 4 new countries and more than 500 new cities. DoorDash Inc. (NASDAQ:DASH) has successfully expanded internationally while maintaining strong consumer retention rates, indicating that its product experience resonates well with users.
In the second quarter of 2024, DoorDash Inc. (NASDAQ:DASH) achieved impressive financial results, setting new records for total orders, Marketplace Gross Order Value (GOV), and revenue. The company reported a 23% year-over-year increase in revenue, reaching $2.6 billion, while total orders rose by 19% to 635 million. Additionally, the Marketplace GOV increased by 20% to $19.7 billion. This marks the tenth consecutive quarter where revenue growth outpaced that of Marketplace GOV, showcasing the company’s continued strength in the competitive food delivery market and its effective strategies to expand beyond traditional offerings.
DASH ranks among the top 3 on our list of the best delivery stocks to invest in now. As of the second quarter of 2024, DoorDash Inc. (NASDAQ:DASH) was held by 67 hedge funds, according to Insider Monkey’s database. TimesSquare Capital Management stated the following regarding DoorDash Inc. (NASDAQ:DASH) in its “U.S. Mid Cap Growth Strategy” second-quarter investor letter:
“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. New to the strategy was the online food delivery platform and logistics provider DoorDash Inc. (NASDAQ:DASH) Since its IPO in 2021, the company’s scale has grown to entrench it with customers and consumers, though we have been cautious about its high valuation. Recently, the company reported lower-than-expected guidance for future margins and that caused its shares to sell off. In our view, DoorDash was appropriately investing for future growth and absorbing recent increased wage costs. Believing this short-term price dislocation made for an attractive entry price, we began buying, and DoorDash was up 2% through the end of the quarter.”
2. Uber Technologies Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 145
Uber Technologies Inc. (NYSE:UBER) is a global transportation company that ranks second on our list of the best delivery stocks to invest in now. It offers a variety of services, including ride-hailing, food delivery through Uber Eats, courier services, and freight transport. Uber Eats operates in more than 6,000 cities across 45 countries, connecting consumers with restaurants and grocery stores while matching them with independent delivery providers. Additionally, Uber facilitates connections between shippers and carriers in the freight industry, making it easier to transport goods efficiently.
The company is focusing on strategic growth through several key partnerships and initiatives aimed at expanding its delivery services. In the second quarter of 2024, Uber Technologies Inc. (NYSE:UBER) partnered with Instacart to enable US restaurant delivery within the Instacart app, allowing Instacart customers to order from a wide range of restaurants using an Uber Eats interface. Additionally, Uber expanded its collaboration with Costco, offering members additional savings and discounts on Uber One memberships. The company also announced various partnerships with popular grocery stores and retailers. These partnerships not only enhance Uber’s grocery and retail delivery options but also improve customer engagement by adding stores like The Vitamin Shoppe and GNC to its platform. Uber Technologies Inc. (NYSE:UBER) has also expanded its partnership with Rite Aid to include alcohol delivery at nearly 1,000 locations across eight US states.
In the second quarter of 2024, the company reported a delivery revenue of $3.3 billion, reflecting an 8% increase compared to the same quarter in the previous year. This growth was mainly driven by higher delivery gross bookings. Overall, Uber Technologies Inc. (NYSE:UBER) has managed to grow its revenue by 26% over the past 5 years.
On October 3, Uber Technologies Inc. (NYSE:UBER) announced a multi-year partnership with Avride to integrate delivery robots and autonomous vehicles into its Uber Eats and ride-hailing services. Avride is a US-based startup that develops and operates both autonomous cars and delivery robots. Once the service is launched, customers using Uber Eats or Uber apps may have the option to choose an Avride delivery robot or an autonomous vehicle for their deliveries or rides. The collaboration will begin in Austin with sidewalk delivery robots on Uber Eats, followed by expansions to Dallas and Jersey City.
These strategies position Uber Technologies Inc. (NYSE:UBER) as a strong player in the delivery market, making it an appealing stock option for investors looking to capitalize on the growing demand for delivery services. According to Insider Monkey’s database, 145 hedge funds held stakes in UBER in the second quarter of 2024.
1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com Inc. (NASDAQ:AMZN) is a major American technology company known for its extensive e-commerce platform, which offers a wide variety of products ranging from books to electronics. The company has grown to become the world’s largest online retailer and a leader in cloud computing through its Amazon Web Services (AWS). A key aspect of its business is its delivery services, which include fast shipping options like Amazon Prime, allowing members to receive their orders quickly through same-day delivery, one-day delivery, and two-day delivery service options.
The company’s innovative logistics network continues to redefine online shopping and delivery experiences globally. At the end of July, Amazon.com Inc. (NASDAQ:AMZN) announced a remarkable achievement in its delivery service, reporting that over 5 billion items have already been delivered the same or next day globally this year, marking a 30% increase from the previous year. This record speed not only benefits Prime members by allowing them to receive products faster but also supports small and medium-sized businesses, with many of these deliveries made on behalf of independent sellers using the company’s Fulfillment by Amazon service. Since the launch of Prime in 2005, the selection of items eligible for free Prime shipping has expanded from just one million to over 300 million, with tens of millions available for Same-Day or One-Day Delivery. This means that Prime members now enjoy 20 times more options delivered much quicker than before, enhancing the overall value of their membership.
In November 2023, The Wall Street Journal reported that Amazon.com Inc. (NASDAQ:AMZN) surpassed UPS in parcel volume in 2022 and surpassed FedEx in 2020, with expectations that this lead will continue to grow based on internal Amazon data.
Amazon.com Inc. (NASDAQ:AMZN) is actively enhancing its services to provide even greater value to its Prime members, which makes it an attractive delivery stock to consider.
In the first half of 2024, the company achieved record delivery speeds and this rapid delivery is supported by an expanded selection of products, including popular brands like Aéropostale and Kiehl’s. Additionally, Amazon.com Inc. (NASDAQ:AMZN) now offers US Prime members a Grubhub+ membership, valued at $120 a year, and has launched grocery delivery subscriptions that allow unlimited deliveries for a low monthly fee when shopping at the company’s fresh stores in the US and the UK.
Moreover, Amazon.com Inc. (NASDAQ:AMZN) is leveraging advanced technology, including AI-powered features like the shopping assistant Rufus, to improve customer experience. The company has also expanded its pharmacy services, providing Medicare members access to essential medications for just $5 a month.
These strategic initiatives combined with the company’s focus on speed, selection, and added value position Amazon.com Inc. (NASDAQ:AMZN) as a strong contender in the delivery market. According to Insider Monkey’s database, AMZN has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 308 in Q2 2024, up from 302 in the previous quarter.
Overall, AMZN ranks first among the 7 best delivery stocks to invest in now. While we acknowledge the potential of delivery companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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