Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

United Parcel Service, Inc. (UPS)

Company Dividend Discount ModelIndustry: Integrated Freight & LogisticsSector: Industrials

Valuation Snapshot

Stable Growth$136.48 - $324.49$201.52
Multi-Stage$118.41 - $129.02$123.62
Blended Fair Value$162.57
Current Price$83.53
Upside94.63%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.07%8.60%6.346.316.014.043.963.753.543.263.112.97
YoY Growth--0.50%5.04%48.79%1.87%5.64%6.08%8.66%4.84%4.67%6.72%
Dividend Yield--5.77%4.28%3.10%1.88%2.33%4.02%3.09%3.11%2.89%2.81%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)5,502.00
(-) Cash Dividends Paid (M)5,395.00
(=) Cash Retained (M)107.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,100.40687.75412.65
Cash Retained (M)107.00107.00107.00
(-) Cash Required (M)-1,100.40-687.75-412.65
(=) Excess Retained (M)-993.40-580.75-305.65
(/) Shares Outstanding (M)851.00851.00851.00
(=) Excess Retained per Share-1.17-0.68-0.36
LTM Dividend per Share6.346.346.34
(+) Excess Retained per Share-1.17-0.68-0.36
(=) Adjusted Dividend5.175.665.98
WACC / Discount Rate8.60%8.60%8.60%
Growth Rate4.63%5.63%6.63%
Fair Value$136.48$201.52$324.49
Upside / Downside63.39%141.26%288.47%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)5,502.005,811.836,139.106,484.806,849.977,235.707,452.78
Payout Ratio98.06%96.44%94.83%93.22%91.61%90.00%92.50%
Projected Dividends (M)5,395.005,605.175,821.906,045.276,275.336,512.136,893.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.60%8.60%8.60%
Growth Rate4.63%5.63%6.63%
Year 1 PV (M)5,112.615,161.475,210.33
Year 2 PV (M)4,843.644,936.675,030.58
Year 3 PV (M)4,587.504,720.294,855.63
Year 4 PV (M)4,343.614,512.064,685.36
Year 5 PV (M)4,111.414,311.674,519.66
PV of Terminal Value (M)77,770.8681,559.0185,493.36
Equity Value (M)100,769.62105,201.17109,794.92
Shares Outstanding (M)851.00851.00851.00
Fair Value$118.41$123.62$129.02
Upside / Downside41.76%48.00%54.46%

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