7. United Parcel Service, Inc. (NYSE:UPS)
Dividend Yield as of January 21: 4.92%
United Parcel Service, Inc. (NYSE:UPS) is an American multinational shipping and supply chain management company offering its consumers various related services. The company is concentrating on expanding its healthcare logistics services and aims to establish itself as a global leader in this field. In January 2025, the company successfully acquired Frigo-Trans and its affiliated company BPL. This acquisition strengthens UPS’s ability to offer comprehensive temperature-controlled logistics solutions, especially in Europe. Since the start of 2025, the stock has surged by over 7%.
In the third quarter of 2024, United Parcel Service, Inc. (NYSE:UPS) reported revenue of $22.2 billion, reflecting a 5.6% increase compared to the same quarter last year. This result exceeded analysts’ expectations by $115.3 million. Additionally, its operating profit rose significantly to $974 million, up from $665 million in the previous year. Artisan Partners highlighted the company’s strengths in its Q3 2024 investor letter. Here is what the firm has to say:
“We made no new purchases in Q3. Instead, our purchase activity was focused on adding to a few of our existing names that remain cheap, such as Dollar General and United Parcel Service, Inc. (NYSE:UPS). When we initiated our position in UPS in late 2023, 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. 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—now yielding 4.8%. More recently, the stock has been weak because profits came in weaker than expected. UPS’ customers traded down to the lower yielding ground segment, which negatively impacted overall pricing and margins. These shifts are common and occur in both directions, but what is important, in our view, is the long-term trend of volume growth remains intact. Nevertheless, investors have lost patience with UPS after a string of earnings disappointments.”
United Parcel Service, Inc. (NYSE:UPS) has also attracted investors due to its strong cash position. The company’s trailing twelve-month operating cash flow came in at $9.22 billion and its levered free cash flow for the period amounted to $4.1 billion. The company maintains a 22-year streak of consistent dividend growth, which makes UPS one of the best Cash App stocks on our list. Its quarterly per-share dividend comes in at $1.63 and it supports a dividend yield of 4.92%, as of January 21.
Insider Monkey’s database of Q3 2024 indicated that 43 hedge funds owned stakes in United Parcel Service, Inc. (NYSE:UPS), compared with 44 in the previous quarter. These stakes have a total value of over $1.66 billion.
