If your holiday gifts made it under the Christmas tree just in time, there's a good chance at least one was delivered by United Parcel Service (NYSE: UPS). As the world's largest package delivery company, UPS handled an average of 22.3 million packages and documents per day in 2023.
On top of that, UPS currently offers an attractive forward dividend yield of 5.19%. Despite weathering some challenges, the company's 15-year streak of consecutive dividend increases signals that payouts aren't going away anytime soon.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
UPS targets a dividend payout ratio of approximately 50% of prior year adjusted earnings per share. During anearnings callearlier this year, CEO Carol Tomé reaffirmed the company's commitment to dividends, stating: "We have no intent to cut the dividend to make that math work. We're going to earn back into it."
While nothing in investing is ever a sure bet, UPS' track record offers some hints about what might be next for shareholders.
| Dividend Increase Payable | Quarterly Dividend Raise |
|---|---|
| March 8, 2024 | $1.63 |
| March 10, 2023 | $1.62 |
| March 10, 2022 | $1.52 |
| March 10, 2021 | $1.02 |
| March 10, 2020 | $1.01 |
| March 12, 2019 | $0.96 |
| March 7, 2018 | $0.91 |
| March 8, 2017 | $0.83 |
| March 9, 2016 | $0.78 |
| March 10, 2015 | $0.73 |
| March 11, 2014 | $0.67 |
Data source: UPS. Chart by author.
UPS has steadily raised its dividend, with recent increases being more modest. For 2025, the size of the raise will hinge on UPS' financial performance and broader market conditions. A cautious estimate would bump the quarterly dividend to $1.64, bringing the annual payout to $6.56 per share. Or UPS could stick to its current payout of $1.63 per quarter, keeping the annual total at $6.52 per share in 2025.
Of course, surprises aren't off the table. A stronger-than-expected holiday season or better financial results could deliver a bigger dividend boost. While the exact dividend payout for 2025 remains a question mark, one thing is clear: Management hopes to maintain the dividend and avoid any cuts.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $363,593!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $48,899!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $502,684!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 23, 2024
Charlene Rhinehart has no position in any of the stocks mentioned. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
