We not too long ago printed a listing of the 20 Greatest Dividend Development Shares with Excessive Yields. On this article, we’re going to try the place United Parcel Service, Inc. (NYSE:UPS) stands in opposition to different greatest dividend development shares.
Dividend-paying shares have been gaining reputation amongst buyers as a consequence of their long-term benefits. In line with Jeremy Zirin, who leads the US fairness workforce for personal purchasers at UBS Asset Administration, corporations with a constant observe report of accelerating dividends are a wise alternative for buyers searching for a balanced strategy within the present market atmosphere. When markets dipped in April after President Donald Trump introduced new tariff insurance policies, buyers gravitated towards high-yield dividend shares. Nonetheless, as commerce tensions started to ease and negotiations progressed, markets recovered. Shares surged notably after the US and China agreed to briefly scale back tariffs. He made the next remark about dividend shares:
“The upper-dividend-yielding methods are likely to do higher when markets are in actual turmoil and declining, but when there’s extra chop, extra volatility and doubtlessly upside … you don’t need to be overly defensive.”
Traditionally, corporations that persistently improve their dividends have tended to be much less risky and sometimes delivered stronger returns than the broader market, together with benchmarks just like the S&P Equal Weight Index. In line with a report by Guggenheim, from Could 2005 by December 2024, corporations that both initiated or raised their dividends generated a median annual return of 10.5%. In distinction, corporations that reduce or suspended their payouts posted simply 5.5% yearly. The general market returned 10.4% throughout this timeframe, barely behind the dividend growers. The report additionally highlighted that dividend development methods have traditionally carried out effectively in each rising and falling markets, making them a beautiful possibility for buyers centered on long-term beneficial properties and draw back safety.
In line with a report by S&P International, the expansion of world dividend funds had been slowing because the post-COVID restoration, however that pattern reversed final 12 months. In 2024, the expansion price unexpectedly accelerated to eight%, with shareholders receiving roughly $180 billion greater than the earlier 12 months. This improve got here as a shock given the persistent geopolitical and financial challenges. The report additionally highlighted that a number of sectors and areas noticed report dividend initiations, together with the US know-how, media, and telecom (TMT) sector, banks in Italy and Spain, Japan’s automotive trade, and a normal rise in payouts from Mainland China. Even with excessive worth fluctuations, dividend funds from the oil and fuel sector remained sturdy. Trying forward, the report recommended that this excessive degree of dividends is prone to maintain regular, with world payouts anticipated to stay at $2.3 trillion in 2025.
With rising investor urge for food for dividend-paying shares, many corporations have responded by progressively rising their dividend payouts. A report by Janus Henderson revealed that world dividend funds reached a report $1.75 trillion in 2024, reflecting a 6.6% rise on an underlying foundation. The general development price got here in at 5.2%, barely held again by a drop in particular one-time dividends and the impact of a stronger U.S. greenback. Out of the 49 nations lined within the report, 17—together with main economies such because the US, Canada, France, Japan, and China—posted record-high dividend ranges. In whole, 88% of corporations both raised or held their dividends regular over the 12 months.
Is United Parcel Service, Inc. (UPS) the Greatest Dividend Development Inventory with Excessive Yields?
A warehouse full of packing containers of parcels, symbolizing the businesses dependable logistics providers.
For this listing, we screened for dividend shares with yields greater than 3% as of Could 13. From this group, we additional refined our choice standards by figuring out shares with a dividend development streak of 10 years or extra. The shares are ranked in ascending order of their dividend yields.
At Insider Monkey, we’re obsessive about hedge funds. Why are we within the shares that hedge funds pile into? The reason being easy: our analysis has proven that we are able to outperform the market by imitating the highest inventory picks of the most effective hedge funds. Our quarterly publication’s technique selects 14 small-cap and large-cap shares each quarter and has returned 373.4% since Could 2014, beating its benchmark by 218 share factors (see extra particulars right here).
Dividend Yield as of Could 13: 6.84%
United Parcel Service, Inc. (NYSE:UPS) ranks fourth on our listing of the most effective dividend development shares with excessive yields. The American multinational delivery and provide chain administration firm is among the world’s largest organizations. The corporate presents a wide selection of complete logistics providers to purchasers throughout over 200 nations and areas worldwide.
Within the first quarter of 2025, United Parcel Service, Inc. (NYSE:UPS) reported income of $21.5 billion, in contrast with $21.7 billion in the identical interval final 12 months. The income exceeded analysts’ estimates by $496.7 million. The corporate reported consolidated working revenue of $1.7 billion within the first quarter, reflecting a 3.3% improve year-over-year and a 0.9% rise on an adjusted non-GAAP foundation. Within the US section, income rose by 1.4%, supported by beneficial properties in air cargo and a 4.5% uptick in income per piece, which helped counterbalance decrease volumes. The adjusted working margin for the section stood at 7.0%.
United Parcel Service, Inc. (NYSE:UPS) generated $2.3 billion in working money circulate, and its free money circulate amounted to $$1.48 billion. Resulting from this constant money era, the corporate has been capable of elevate its payouts for 23 consecutive years. It presents a quarterly dividend of $1.64 per share and has a dividend yield of 6.84%, as of Could 13.
Total, UPS ranks 4th on our listing of the most effective dividend development shares with excessive yields. Whereas we acknowledge the potential of UPS as an funding, our conviction lies within the perception that some deeply undervalued dividend shares maintain better promise for delivering greater returns, and doing so inside a shorter timeframe. In case you are searching for a deeply undervalued dividend inventory that’s extra promising than UPS however that trades at 10 instances its earnings and grows its earnings at double digit charges yearly, try our report in regards to the filth low-cost dividend inventory.
