May 25, 2025 a 11:30 am
📊 UPS: Dividend Analysis - United Parcel Service, Inc.
United Parcel Service, Inc. (UPS) exhibits a solid dividend profile with a stable history of payments and growth, making it an attractive consideration for dividend investors. The company has maintained an impressive dividend history over 27 years, reflecting its commitment to returning capital to shareholders. While recent financial data shows room for efficiency improvement, UPS's strategic direction remains geared towards sustaining its payout capabilities.
📈 Overview
The table below provides an overview of some key dividend metrics for UPS:
| Metric | Value |
|---|---|
| Sector | Logistics |
| Dividend Yield | 6.60% |
| Current Dividend per Share | 6.31 USD |
| Dividend History | 27 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
UPS has demonstrated a consistent ability to pay dividends, showcasing resilience and a strong market position. This reliability is crucial for long-term investors seeking stable returns through dividends.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 3.28 |
| 2024 | 6.52 |
| 2023 | 6.48 |
| 2022 | 6.08 |
| 2021 | 4.08 |
📉 Dividend Growth
Monitoring dividend growth is essential to understand a company's ability to increase its payouts over time. UPS has shown moderate growth, indicative of its profitability and management's resolve to enhance shareholder value.
| Time | Growth |
|---|---|
| 3 years | 16.91% |
| 5 years | 11.17% |
The average dividend growth is 11.17% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratio indicates the proportion of earnings or cash flow used for dividend payments, crucial for assessing the sustainability of dividends. A higher ratio may signal financial strain.
| Key figure | Ratio |
|---|---|
| EPS-based | 91.70% |
| Free cash flow-based | 99.50% |
UPS's EPS payout ratio of 91.70% and FCF payout ratio of 99.50% suggest limited room for increase, aligning with a conservative payout policy. These levels warrant monitoring for future sustainability.
✅ Cashflow & Capital Efficiency
Analyzing cash flow metrics provides insights into a company's operational strength and ability to maintain dividend payments. The following table summarizes UPS's performance in these areas:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 5.76% | 3.76% | 6.17% |
| Earnings Yield | 5.36% | 4.97% | 7.63% |
| CAPEX to Operating Cash Flow | 41.10% | 50.38% | 33.81% |
| Stock-based Compensation to Revenue | 0.03% | 0.24% | 1.56% |
| Free Cash Flow / Operating Cash Flow Ratio | 61.38% | 49.62% | 66.19% |
UPS exhibits a solid cash flow position, emphasizing the company's ability to sustainably finance its dividend payment from operating cash flow.
🧮 Balance Sheet & Leverage Analysis
A strong balance sheet provides a safety cushion, helping companies sustain dividends during downturns. The following metrics illustrate UPS's financial stability:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.53 | 1.54 | 1.19 |
| Debt-to-Assets | 36.61% | 37.72% | 33.07% |
| Debt-to-Capital | 60.54% | 60.70% | 54.31% |
| Net Debt to EBITDA | 1.64 | 1.85 | 1.05 |
| Current Ratio | 1.17 | 1.10 | 1.22 |
| Quick Ratio | 1.17 | 1.05 | 1.18 |
| Financial Leverage | 4.19 | 4.09 | 3.59 |
UPS's leverage ratios indicate a prudent debt management strategy with enough liquidity to cover short-term obligations, enhancing its dividend payment stability.
💪 Fundamental Strength & Profitability
Assessing profitability and fundamental strength highlights UPS's ability to generate profits and reinvest in the business sustainably. Here’s a breakdown of key metrics:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 34.59% | 38.76% | 58.36% |
| Return on Assets | 8.25% | 9.47% | 16.24% |
| Net Profit Margin | 6.35% | 7.37% | 11.51% |
| EBIT Margin | 9.12% | 10.29% | 15.48% |
| EBITDA Margin | 13.08% | 13.98% | 16.95% |
| Gross Profit Margin | 21.26% | 18.94% | 13.05% |
| R&D to Revenue | 0% | 0% | 0% |
UPS demonstrates robust profitability with a solid return on equity and assets, supporting its capacity to continually reward shareholders through dividends.
📉 Price Development
🔍 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 5 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 3 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 33/40
🏅 Rating
In conclusion, UPS offers a compelling dividend profile with consistent growth and a robust historical track record. While some financial metrics suggest caution, the overall stability and strategy of UPS make it a strong candidate for dividend-focused investors. We recommend considering UPS as part of a diversified income-oriented portfolio.