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United Parcel Service, Inc. (UPS)

Company Dividend Discount ModelIndustry: Integrated Freight & LogisticsSector: Industrials

Valuation Snapshot

Stable Growth$121.16 - $258.51$172.37
Multi-Stage$108.63 - $118.27$113.36
Blended Fair Value$142.87
Current Price$83.53
Upside71.04%
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 Rate9.10%9.10%9.10%
Growth Rate4.63%5.63%6.63%
Fair Value$121.16$172.37$258.51
Upside / Downside45.04%106.35%209.48%

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 Rate9.10%9.10%9.10%
Growth Rate4.63%5.63%6.63%
Year 1 PV (M)5,089.105,137.745,186.38
Year 2 PV (M)4,799.204,891.384,984.43
Year 3 PV (M)4,524.524,655.494,788.96
Year 4 PV (M)4,264.284,429.654,599.79
Year 5 PV (M)4,017.764,213.474,416.72
PV of Terminal Value (M)69,748.2673,145.6476,674.13
Equity Value (M)92,443.1296,473.36100,650.41
Shares Outstanding (M)851.00851.00851.00
Fair Value$108.63$113.36$118.27
Upside / Downside30.05%35.72%41.59%

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