United Parcel Service’s fiscal 1Q18 dividend
On February 8, 2018, United Parcel Service (UPS), the world’s largest parcel delivery company, announced a 10% rise in its regular quarterly dividend. It will pay a quarterly dividend of $0.91 per share on all outstanding Class A and Class B shares, payable on March 7, 2018, to shareholders of record as of February 20, 2018.
UPS’s dividend history and growth
United Parcel Service has a robust history of rewarding stock owners with regular cash dividends. Brown, its nickname in the logistics (XLI) industry, has paid a cash dividend each year since 1969. It quadrupled its common dividend after it became a public entity at the end of 1999.
As you can see in the above graph, UPS has either kept its per share dividend constant or raised it year-over-year for the past 18 years. The current 10% rise is more than the quarterly cash dividend of $0.83 per share paid in 4Q17. The last time the company raised its dividends in the double digits was 2012 when its dividend increased 10%. Its CAGR (compound annual growth rate) was 8% in the last eight years.
UPS chairman and CEO (chief executive officer) David Abney said, “Dividends remain a high priority at UPS. Our strong cash flow from operations has enabled us to pay a stable or growing dividend for nearly 50 years.”
Peer group’s dividend growth
FedEx (FDX) has kept its dividend constant at $0.50 per share for the last three quarters. It will announce its fiscal 3Q18 earnings on March 20, 2018. It follows a June-to-May accounting year.
In its 4Q17 earnings call, Old Dominion Freight Lines (ODFL) announced a 30% rise in its quarterly dividend to $0.13 per share.
C.H. Robinson Worldwide (CHRW) paid a quarterly dividend of $0.46 per share in 4Q17, which compares to $0.45 per share in 3Q17.
For the last ten quarters, ArcBest (ARCB) has paid a quarterly dividend of $0.08 per share.
In the next part of this series on UPS’s equity dividends, we’ll look at the company’s free cash flow.