Logistically tough United Parcel Service (NYSE:UPS) is a name that investors are following closely thanks to the growth of e-commerce. However, its appeal transcends its status as a premier logistics company, as it has been steadily growing its robust dividend for fifteen years – an encouraging sign for those looking to supplement their passive income streams.
But smart investors know that while the stock’s high-yield dividend – currently 4.7% – is attractive, it’s important to see whether the hefty payout threatens the company’s financial well-being. With this in mind, let’s take a look at how much UPS plans to pay out in dividends in 2024 to better assess the company’s financial health.
Big Brown pays big dividends
Although its history dates back to 1907, UPS has a much abbreviated history of rewarding shareholders with a dividend. It started providing benefits in 1999. After intermittent periods of maintaining the same dividend amount from year to year, UPS began a 15-year journey. – one that is still ongoing – of making ever larger dividend payments.
UPS expects to pay a quarterly dividend of $1.63 through 2024. If the company delivers on these prospects, UPS will return approximately $5.4 billion in dividends to shareholders in 2024. Under certain circumstances, UPS returned $5.37 billion and $5.11 billion to shareholders in 2023 and 2022. respectively.
Currently, UPS stock offers investors a forward yield of 4.7%. Smart investors are often cautious when it comes to high-yield dividends like these, because the attractively high payout can coincide with a company’s poor financial health. With a payout ratio averaging 84% over the past decade, it appears the company isn’t sacrificing its financial well-being to please shareholders.
Should UPS Stocks Be Part of Your Portfolio?
For income investors, a business logistics leader like UPS is a good consideration right now, especially given its price-to-operating cash flow multiple of 10.7. However, it’s important to realize that further research is warranted before clicking the buy button to ensure UPS is a smart buy at this time.
Should you invest $1,000 in United Parcel Service now?
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.
How much will United Parcel Service pay out in dividends this year? was originally published by The Motley Fool
