Dividend Achievers List: Top 15

4. United Parcel Service, Inc. (NYSE:UPS)

Dividend Yield as of September 22: 5.07%

United Parcel Service, Inc. (NYSE:UPS) is a multinational shipping and supply chain management company that offers various related services to its consumers. The company is a strong dividend payer, having raised its payouts for 22 years in a row. In the past five years, it increased its dividends at an annual average rate of 12%. This dividend growth is mainly attributed to its stable cash position. In the first six months of the year, it posted an operating cash flow of $5.3 billion and its free cash flow for the period amounted to $3.3 billion. The company’s quarterly dividend sits at $1.63 per share for a dividend yield of 5.07%, as of September 22.

United Parcel Service, Inc. (NYSE:UPS) has faced challenges adapting to a changing business environment, characterized by reduced shipping demand and increasing inflationary pressures. It fell short of high-growth expectations as analysts noted a decline in package volumes. Additionally, rising fuel and labor costs squeezed profit margins, impacting earnings. In Q2 2024, the company reported $21.8 billion in revenue, a 1.07% decrease from the same period last year, while operating profit dropped 30% year-over-year to $1.9 billion. The stock is down by over 18% since the start of 2024.

Analysts are reevaluating their outlook on the company in light of its ongoing challenges. ClearBridge Investments also decreased its position in United Parcel Service, Inc. (NYSE:UPS) in the second quarter of 2024 and made the following comment in its Q2 2024 investor letter:

“Our industrials holdings weighed on relative performance as we are more exposed to transports such as “less than truckload” provider XPO and parcel delivery company United Parcel Service, Inc. (NYSE:UPS), which are struggling with weak volumes during the post-COVID freight recession. With industry volumes down to pre-COVID levels and strong pricing power in the LTL space in particular, we believe that the next upcycle will prove to be very strong for earnings. As a result, we added to XPO in the quarter while reducing our position in UPS on concerns that industry capacity remains excessive. Meanwhile, we have less exposure to electrical equipment stocks, which have been rewarded by views that they will benefit from the buildout of AI data centers.”

As per Insider Monkey’s database of Q2 2024, 44 hedge funds held stakes in United Parcel Service, Inc. (NYSE:UPS), up from 43 in the previous quarter. These stakes have a total value of over $1.3 billion.