A Decade of Rewards: $54 Bil From United Parcel Service Stock

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UPS: United Parcel Service logo
UPS
United Parcel Service

In the last decade, United Parcel Service (UPS) stock 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 stock has returned the 51st highest amount to shareholders in history.

  UPS S&P Median
Dividends $39 Bil $4.5 Bil
Share Repurchase $15 Bil $5.6 Bil
Total Returned $54 Bil $9.4 Bil
Total Returned as % of Current Market Cap 57.1% 24.8%

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 stocks 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 Stocks By Total Shareholder Return

Relevant Articles
  1. Should You Buy Or Sell UPS Stock At $105?
  2. United Parcel Service Stock Has Paid Out $54 Bil to Investors in the Past Decade
  3. UPS Has Paid Out $54 Bil to Investors in the Past Decade
  4. UPS Stock Down -18% after 5-Day Loss Streak
  5. S&P 500 Stocks Trading At 52-Week Low
  6. S&P 500 Movers | Winners: GLW, INCY, CDNS | Losers: CARR, UPS, BRO

  Total Money Returned As % Of Current Market Cap via Dividends via Share Repurchases
AAPL $874 Bil 22.0% $143 Bil $731 Bil
MSFT $376 Bil 12.3% $172 Bil $204 Bil
GOOGL $357 Bil 8.7% $15 Bil $342 Bil
XOM $218 Bil 35.4% $146 Bil $72 Bil
WFC $212 Bil 72.0% $58 Bil $153 Bil
META $184 Bil 10.6% $10 Bil $174 Bil
JPM $181 Bil 20.8% $0.0 $181 Bil
JNJ $159 Bil 28.4% $105 Bil $54 Bil
ORCL $158 Bil 35.7% $35 Bil $123 Bil
CVX $157 Bil 45.4% $99 Bil $58 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. Stocks like Meta (META) and Microsoft (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 United Parcel Service Stock for more details)

United Parcel Service Fundamentals

  • Revenue Growth: -1.3% LTM and -3.9% last 3-year average.
  • Cash Generation: Nearly 4.9% free cash flow margin and 9.2% operating margin LTM.
  • Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for UPS was -7.9%.
  • Valuation: United Parcel Service stock trades at a P/E multiple of 17.2

  UPS S&P Median
Sector Industrials
Industry Air Freight & Logistics
PE Ratio 17.2 24.6

   
LTM* Revenue Growth -1.3% 6.4%
3Y Average Annual Revenue Growth -3.9% 5.6%
Min Annual Revenue Growth Last 3Y -7.9% 0.3%

   
LTM* Operating Margin 9.2% 18.8%
3Y Average Operating Margin 9.5% 18.3%
LTM* Free Cash Flow Margin 4.9% 14.0%

*LTM: Last Twelve Months

The table gives good overview of what you get from UPS stock, but what about the risk?

UPS Historical Risk

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 Covid sell-off still knocked it down around 30% and 27%, respectively. Even the recent inflation shock took it down close to 38%. Sure, UPS has strong fundamentals, but these numbers show that no stock is completely safe when markets get turbulent.

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.