We recently released a list 20 Best Dividend Growth Stocks High Yield. In this article, we will look at United Parcel Service, Inc. (NYSE:UPS) Position against other best dividend growth stocks.
Due to its long-term advantages, dividend stocks for investors have been growing in popularity. According to Jeremy Zirin, who leads the U.S. equity team at UBS Asset Management, companies with a record of sustained dividends are a wise choice for investors looking for a balanced approach in the current market environment. Investors tend toward high-yield dividend stocks when markets fell in April after President Donald Trump announced new tariffs. But the market resumed as trade tensions began to ease and negotiations progressed. Stocks soared particularly after the U.S. and China agreed to temporarily lower tariffs. He made the following comments on dividend stocks:
“When the market is really volatile and down, higher production strategies tend to be better, but if there is more cut, more volatility and potential upside…you don’t want to be overly defensive.”
Historically, companies that continue to increase their dividends tend to deliver higher returns than broader markets, including benchmarks such as S&P, such as weight indexes. According to a report by Guggenheim, from May 2005 to December 2024, the average annual rate of return for companies that initiate or increase their dividends is 10.5%. Companies that cut or suspend spending, by comparison, report only 5.5% per year. The overall market returned 10.4% during this period, slightly lower than dividend growers. The report also highlights that dividend growth strategies have historically performed well in both rising and falling markets, making them an attractive option for investors focused on long-term growth and downside protection.
Growth in global dividend payments has been slowing since the recovery after recovery, but this trend reversed last year, according to a report from S&P Global. In 2024, growth unexpectedly accelerated to 8%, with shareholder revenue increasing by about $180 billion from the previous year. This growth is surprising given the ongoing geopolitical and economic challenges. The report also highlighted that several sectors and regions have seen record dividend initiatives, including the U.S. technology, media and telecommunications (TMT) sector, banks in Italy and Spain, the automotive industry in Japan, and the overall increase in payments in mainland China. Even with extremely high bid volatility, dividend payments in the oil and gas sector remain strong. Looking ahead, the report shows that this high dividend is likely to remain stable, with global spending expected to remain $2.3 trillion in 2025.
As investors demand dividend payments stocks, many companies responded by gradually increasing dividend spending. A report by Janus Henderson shows that global dividend payments hit a record $1.7.5 trillion in 2024, reflecting a 6.6% base. The overall growth rate is 5.2%, which is slightly lower due to the special one-time dividend decline and the higher dollar effect. Among the 49 countries covered in the report, including major economies such as the United States, Canada, France, Japan and China, this is a record dividend level. A total of 88% of companies raise or keep their dividends stable over the course of the year.
The warehouse is filled with parcels, symbolizing the company's reliable logistics services.
For this list, we filtered dividend stocks with yields above 3% as of May 13. From this group, we further refined our selection criteria by determining stocks with dividend growth streaks over 10 years or more. These stocks are ranked in the rising order of their dividend yield.
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As of May 13: 6.84%
United Parcel Service, Inc. (NYSE:UPS) ranked fourth among our best dividend growth stocks. The U.S. transnational transportation and supply chain management company is one of the largest organizations in the world. The company provides a wide range of comprehensive logistics services to customers in more than 200 countries and regions around the world.
In the first quarter of 2025, United Parcel Service, Inc. (NYSE:UPS) reported revenue of $21.5 billion, compared with $21.7 billion in the same period last year. Revenue exceeded analyst estimates of $496.7 million. The company reported consolidated operating profit of $1.7 billion in the first quarter, reflecting a year-on-year increase of 3.3% and a 0.9% increase based on adjusted non-GAAP. In the U.S. sector, revenue grew 1.4%, supported by growth in air cargo and 4.5% per block of revenue, which helps balance lower currencies. The adjusted working margin for this segment is 7.0%.
United Parcel Service, Inc. (NYSE:UPS) generated $2.3 billion in operating cash flow, with free cash flow of $1.48 billion. Due to this consistent cash generation, the company has been able to increase spending for 23 consecutive years. As of May 13, it offered a quarterly dividend of $1.64 per share, with a dividend yield of 6.84%.
Overall, UPS Ranked fourth On our list of best dividend growth stocks. Although we acknowledge that the potential of UPS is an investment, our belief is that certain undervalued dividend stocks have greater hope to offer higher returns and do so in a shorter time frame. If you are looking for an undervalued dividend stock that has a more promising dividend than UPS, but has 10 times the earnings that grow in double-digit revenue each year, check out our report Dirt cheap dividend stocks.
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Disclosure: None. This article was originally published in Inside monkey.