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United Parcel Service, Inc. (UPS)

Company Dividend Discount ModelIndustry: Integrated Freight & LogisticsSector: Industrials

Valuation Snapshot

Stable Growth$121.65 - $260.41$173.27
Multi-Stage$108.95 - $118.63$113.70
Blended Fair Value$143.49
Current Price$83.53
Upside71.78%
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 Rate9.08%9.08%9.08%
Growth Rate4.63%5.63%6.63%
Fair Value$121.65$173.27$260.41
Upside / Downside45.63%107.43%211.76%

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 Rate9.08%9.08%9.08%
Growth Rate4.63%5.63%6.63%
Year 1 PV (M)5,089.945,138.595,187.23
Year 2 PV (M)4,800.794,892.994,986.07
Year 3 PV (M)4,526.764,657.794,791.33
Year 4 PV (M)4,267.094,432.584,602.83
Year 5 PV (M)4,021.084,216.944,420.36
PV of Terminal Value (M)70,012.4973,422.7476,964.60
Equity Value (M)92,718.1596,761.63100,952.43
Shares Outstanding (M)851.00851.00851.00
Fair Value$108.95$113.70$118.63
Upside / Downside30.43%36.12%42.02%

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