Shipping giant United Parcel Service (UPS) is in focus as the company delivers solid dividend growth and stable fundamentals.
UPS — headquartered in Atlanta — ships documents and packages worldwide. The company is the largest courier company in the world, having generated $100.3 billion in revenue in 2022, 78% of which came domestically.
UPS has a lot of promising traits to look for in a top dividend stock. In the fourth-quarter earnings release on Jan. 31, the company announced it raised its quarterly dividend by 6.6%, to $1.62 per share.
14 Straight Years Of Higher Dividends
This marked the 14th consecutive year of dividend increases for the shipping company. While the current 3.5% dividend yield isn’t groundbreaking, it is over double the 1.6% yield of the S&P 500 and very competitive against other large-cap companies.
The established nature of UPS’ operations can lead to some solace for investors and security for future dividend growth. This is highlighted by an upper-medium investment grade debt rated (A) by S&P Global.
Net debt is also very modest, at a paltry $11.7 billion, compared to UPS’ $156 billion market cap.
Funds generally like the company’s prospects. The number of mutual funds holding UPS shares stood at 3,117 as of December, an increase of 326 from a year prior.
Looking forward, fears of a global economic slowdown have led earnings expectations to moderate slightly. After reporting earnings of $12.94 per share in 2022, EPS is projected to soften to $11.51 this year before rebounding to $12.41 in 2024.
Shares of UPS are finding support at both the 10-week and 40-week moving averages, which are looking to potentially turn higher.
The dividend stock is forming a double-bottom base with a buy point identified at 209.49. An aggressive entry can be seen at 193.81 also.