Shares of UPS are up nearly 15%, as of mid-day Tuesday, after the company posted fourth-quarter revenue and earnings ahead of analysts’ expectations.
The shipping and receiving and supply chain management company raised its quarterly dividend by 49%, or $0.50 per share, reflecting the largest increase since the company’s public-markets debut in 1999, the Wall Street Journal reports.
The planned per-share payout of $1.52 reflects the company’s new policy under CEO Carol Tomé to return half of earnings to shareholders through its dividend, according to the Wall Street Journal.
The company also said that it would reach its long-range revenue and operating profit targets sooner than expected, anticipating reaching the milestone at the end of this year, instead of 2023.
The company’s strategy under Tomé, who took the helm in 2020, focuses on “quality over quantity," or prioritizing shipping more packages for its more profitable customers and letting go of some shipping volume where it wasn’t seeing the same profitability.
A way to identify a high quality company is to look through its history of dividends; dividends should increase over time.
The companies paying dividends are often mature firms — though some can be quite small — that have mastered their business, made the essential investments, and now generate more money than they have a meaningful use for, David Snowball, publisher of the Mutual Fund Observer, previously said
Snowball said that equity income funds, the funds which seek out companies that allocate a fair amount of income to paying out dividends, can be an ideal strategy for conservative, long-term equity investors.
An actively managed portfolio of dividend-paying securities, such as the Guinness Atkinson SmartETFs Dividend Builder ETF (DIVS ), leaves the stock picking to the experts. DIVS invests globally in high quality dividend growers, companies with a long history of persistently high return on capital.
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