UPS

Six S&P 500 'safer' high-yield dividend stocks—Regions Financial, Ford, AT&T, Pfizer, Verizon, VICI Properties—currently offer attractive buy signals based on free cash flow yields. Analyst projections for the top ten S&P 500 dividend dogs indicate potential net gains of 14.54% to 40.07% by November 2027, with an average estimated gain of 27.42%. Dividend dog strategy favors stocks where annual dividends from $1,000 invested exceed single-share prices and free cash flow yields surpass dividend yields.

Ariel's non-consensus approach seeks to identify undervalued, out-of-favor, franchises that are misunderstood and therefore mispriced. At the sector level, positive stock selection among Consumer Discretionary, Consumer Staples and Health Care were the greatest contributors to returns, while our Information Technology and Industrials holdings as well as overweight exposure to Utilities were the largest performance detractors. We initiated eight new positions during the quarter.

UPS has held its dividend flat for seven straight quarters while paying out nearly 90 cents of every free cash flow dollar, a combination that puts retirees on edge and raises a question management has not fully answered.

The key to the company's growth is margin expansion in its U.S. domestic package segment, now that it has completed a voluntary reduction of Amazon delivery volumes. UPS delivered on its margin target in the third quarter and appears on track for a sequential improvement in the fourth quarter, with management confidently forecasting further improvement in the coming years.

UPS stock has gained in excess of 9% since its strong Q3 results, fueled by profit growth and cost savings. Yet weak volumes and dividend concerns cloud its near-term outlook.

Four stocks are paying out billions in dividends that their cash flows can barely support, and the gap between what investors expect and what the business can actually deliver keeps widening.

Whether you're a value, growth, or momentum investor, finding strong stocks becomes easier with the Zacks Style Scores, a top feature of the Zacks Premium research service.

UPS achieved positive revenue growth of 7% in its most recent quarter. The company's bottom line, however, took a hit from goodwill impairment and transformation costs, resulting in lower earnings compared to the previous year.

UPS rode a pandemic surge to all-time highs, then spent years in freefall while its biggest rival kept stealing volume. Whether a decade of generous dividends was enough to make loyal shareholders whole depends on one uncomfortable number.

UPS is betting that robots and radio tags can protect its dividend while it deliberately ships fewer boxes, but the math only works if one critical margin target holds during the busiest weeks of the year.