July 11, 2019

United Parcel Service: Uninterrupted Dividends Since 1969


Founded in 1907 by two teenagers making retail deliveries, United Parcel Service (UPS) is now the world’s largest package delivery company, serving more than 220 countries and territories.

Thanks to a global fleet of more than 120,000 vehicles, over 500 aircraft, and more than 900 distribution facilities, in 2018 UPS delivered 21 million packages per day for 10.6 million customers including 2.5 million businesses.

UPS’s business is organized into three segments:

1.      Domestic Package (61% of revenue, 53% of operating profit): UPS is a leader in time-sensitive, small package delivery services in the U.S., offering a full spectrum of domestic guaranteed ground and air package transportation services. UPS delivers more ground packages in the U.S. than any other carrier, with average daily package volume of over 14 million, most within one to three business days.

2.      International Package (20% of revenue, 35% of operating profit): UPS first expanded outside the U.S. more than 40 years ago. The company now offers a wide selection of guaranteed day and time-definite international shipping services across Europe, Asia, Canada, Latin America, the Middle East, and Africa. Europe accounts for about half of international revenue.

3.      Supply Chain & Freight Operations (19% of revenue, 12% of operating profit): UPS provides freight forwarding and logistics services to help businesses outsource these non-core activities to get their goods to the right place, at the right time, at a competitive cost. Increasingly complex supply chains are creating more demand for a global offering that handles transportation, distribution, and international trade and brokerage services.





While the domestic business continues to generate the majority of revenue and operating profits, the company continues to expand overseas and diversify into supply chain & freight services.

UPS's operating profit from its U.S. operations has decreased from 88% of the total mix in 2000 to about 70% today. In 2018 the company's international and supply chain businesses made up 47% of operating profits, showing the firm's dedication to diversifying its business and grabbing a large share of the package delivering market in developing nations.

United Postal Services froze its dividend during the financial crisis but has grown it every year since then and paid stable or rising dividends since 1969.



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