NEW YORK, December 29, 2025, 10:47 ET
- UPS shares were down about 0.6% at $99.91 in morning trade, implying roughly a 6.6% yield on its current dividend. 1
- UPS has targeted $3.5 billion of year-over-year cost savings in 2025 as it reshapes operations and pulls back from some lower-margin volume. 2
- The carrier is also investing in higher-value logistics, including healthcare, after completing its $1.6 billion Andlauer Healthcare Group deal in November. 3
United Parcel Service shares slipped below $100 on Monday morning, keeping the package carrier’s dividend yield near 6.6% as investors weighed the company’s overhaul and whether the payout can be sustained. 1
The yield has climbed as the stock has lagged, turning UPS into a closely watched income name even as its core U.S. delivery business faces softer demand and higher costs. 4
That matters now because UPS is in the middle of a network and customer-mix reset that management says is aimed at improving profitability, a shift that will affect cash generation used to fund dividends and investment. 2
In a Dec. 28 analysis, Motley Fool contributor Matt DiLallo said UPS is beginning to show signs of progress from its strategy, pointing to cost savings and improving cash generation. 4
Other recent commentary has been more cautious, warning that a high yield can reflect market concerns about dividend coverage if volumes and earnings remain under pressure. 5
UPS said in its third-quarter report that it had realized about $2.2 billion in cost savings as of Sept. 30 and still expected $3.5 billion of year-over-year savings in 2025. 2
The company is also dialing back deliveries tied to Amazon, its biggest customer, as part of a push to prioritize more profitable packages. UPS has said it aims to reduce Amazon volumes by more than half by the second half of 2026. 6
UPS reported third-quarter revenue of $21.4 billion and non-GAAP adjusted diluted earnings per share of $1.74 in its Oct. 28 earnings release. Companies use “adjusted” results to strip out certain one-time items and show underlying performance. 2
In its U.S. domestic segment, revenue fell to $14.22 billion from $14.60 billion a year earlier, and the company cited lower volume as a key driver. 2
Average daily U.S. domestic package volume fell to 16.15 million in the quarter, from 18.41 million a year earlier, the filing showed. 2
UPS reported free cash flow of $2.74 billion for the first nine months of 2025. Free cash flow is the cash left after capital spending, and it is a key pool of money for dividends and debt reduction. 2
UPS last announced a quarterly dividend of $1.64 per share, payable Dec. 4, or $6.56 a year on an annualized basis. At Monday’s share price, that works out to a yield of about 6.6%. 1
Chief Executive Carol Tomé said UPS was executing “the most significant strategic shift in our company’s history” when it released third-quarter results. 2
UPS has also been pushing deeper into healthcare logistics, completing the acquisition of Canada’s Andlauer Healthcare Group for about $1.6 billion, the company said in November. 3
Rival FedEx, which competes with UPS in U.S. and international parcel delivery, raised its full-year outlook this month after reporting quarterly results, highlighting a mixed backdrop that still includes trade uncertainty. 7
For UPS investors, the next catalyst will be updated guidance on volume, margins and cash generation as the company finishes its 2025 cost-cut plan and absorbs the near-term impact of shifting away from lower-margin deliveries.
