UPS Has Paid Out $54 Bil to Investors in the Past Decade
In the last decade, United Parcel Service (UPS) has returned a notable $54 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, UPS has returned the 50th highest amount to shareholders in history.
| UPS | S&P Median | |
|---|---|---|
| Dividends | $38 Bil | $4.4 Bil |
| Share Repurchase | $16 Bil | $5.5 Bil |
| Total Returned | $54 Bil | $9.1 Bil |
| Total Returned as % of Current Market Cap | 74.9% | 25.9% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Companies By Total Shareholder Return
- United Parcel Service Stock Has Paid Out $54 Bil to Investors in the Past Decade
- UPS Stock Down -18% after 5-Day Loss Streak
- S&P 500 Stocks Trading At 52-Week Low
- S&P 500 Movers | Winners: GLW, INCY, CDNS | Losers: CARR, UPS, BRO
- Will UPS Stock Fall On Upcoming Earnings?
- Is UPS Stock An Opportunity Or Risk?
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $847 Bil | 23.8% | $141 Bil | $706 Bil |
| MSFT | $364 Bil | 9.7% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 12.3% | $12 Bil | $331 Bil |
| XOM | $212 Bil | 43.8% | $145 Bil | $67 Bil |
| WFC | $208 Bil | 80.0% | $59 Bil | $150 Bil |
| META | $178 Bil | 9.6% | $7.7 Bil | $171 Bil |
| JPM | $174 Bil | 20.8% | $0.0 | $174 Bil |
| ORCL | $163 Bil | 25.9% | $34 Bil | $129 Bil |
| JNJ | $157 Bil | 36.5% | $104 Bil | $52 Bil |
| CVX | $153 Bil | 56.2% | $97 Bil | $55 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Companies like META and MSFT are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for UPS. (see Buy or Sell UPS Stock for more details)
UPS Fundamentals
- Revenue Growth: 0.9% LTM and -3.3% last 3-year average.
- Cash Generation: Nearly 3.9% free cash flow margin and 9.3% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for UPS was -6.9%.
- Valuation: UPS trades at a P/E multiple of 12.6
- Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and lower margins
| UPS | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Air Freight & Logistics | – |
| PE Ratio | 12.6 | 24.0 |
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| LTM* Revenue Growth | 0.9% | 5.1% |
| 3Y Average Annual Revenue Growth | -3.3% | 5.3% |
| Min Annual Revenue Growth Last 3Y | -6.9% | -0.1% |
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| LTM* Operating Margin | 9.3% | 18.7% |
| 3Y Average Operating Margin | 9.9% | 17.9% |
| LTM* Free Cash Flow Margin | 3.9% | 13.2% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
UPS Historical Risk
That said, UPS isn’t immune to big drops. It fell about 34% in the Dot-Com crash and nearly 49% during the Global Financial Crisis. The 2018 correction and inflation shock also hit hard, with declines around 31% and 38% respectively. Even the Covid pandemic, which some sectors rode out better, saw UPS dip over 26%. So, while UPS has solid fundamentals, it can still take sizeable hits when markets turn sour.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.