United Parcel Service, Inc. (NYSE:UPS) is included among the 13 Best Dividend Stocks Paying More Than 6%.
On January 9, Bernstein analyst David Vernon raised his price target for United Parcel Service, Inc. (NYSE:UPS) to $125 from $122 and maintained an Outperform rating. Vernon said concerns about the dividend seem overblown, especially as UPS works to improve margins. It also expects future growth to lean more toward higher-performing markets.
UPS stock is down nearly 20% in 2025, and that drop has pushed the dividend yield to an unusually high 6%. It has also raised the dividend payout ratio to approximately 98%. On paper, that leaves little room if earnings don’t improve, which is why dividend risk has become such a big talking point.
Still, United Parcel Service, Inc. (NYSE:UPS) has made its position clear. In a Nov. 6 press release announcing the latest dividend, the company said:
“A commitment to the dividend is one of UPS’s founding principles and a hallmark of the company’s financial strength. UPS has maintained or increased its dividend every year since going public in 1999.”
The next step is execution. UPS is downsizing and reshaping its business, including moving away from Amazon’s lower-margin volume. If that transition holds, the payout ratio should begin to decline as earnings recover. Analysts currently expect earnings per share to rise around 4% in 2026 and 11% in 2027, assuming the company sticks to its plan.
United Parcel Service, Inc. (NYSE: UPS) offers integrated logistics and delivery services to customers in more than 200 countries and territories.
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Disclosure: None.