United Parcel Service, Inc. (NYSE:UPS) has been listed among stocks paying dividends over 6%.
On January 9, Bernstein analyst David Vernon increased his price target for UPS to $125 from $122, maintaining an Outperform rating. Vernon stated that worries about the dividend appear exaggerated, particularly as UPS focuses on margin improvement. He anticipates future growth will shift toward higher-return markets.
UPS shares declined nearly 20% in 2025, elevating the dividend yield to 6% and raising the payout ratio to about 98%. This limited flexibility if profits do not recover has made dividend risk a significant topic.
In a press release on November 6 announcing the latest dividend, UPS clarified its position: "Commitment to the dividend is one of UPS’s core principles and a hallmark of the company’s financial strength. UPS has either maintained or increased its dividend each year since going public in 1999."
UPS is adjusting its business operations, including reducing lower-margin Amazon volume. If this strategy succeeds, the payout ratio is expected to decrease as earnings grow. Analysts project earnings per share to increase approximately 4% in 2026 and 11% in 2027, assuming the plan is implemented.
United Parcel Service, Inc. provides logistics and delivery services in over 200 countries and territories.