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UPS’ Dividend Remains on Shaky Ground

publication date: Dec 18, 2025
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Image Source: UPS. 

Looking to the fourth quarter of 2025, on a consolidated basis, UPS expects revenue to be approximately $24.0 billion on a non-GAAP adjusted operating margin between 11.0%-11.5%. The company reaffirmed a variety of other items, expecting capital expenditures of approximately $2.5 billion, dividend payments of around $5.5 billion, an effective tax rate of approximately 23.75%, $1.4 billion in pension contributions (of which $1.3 billion have been made), and share repurchases of ~$1.0 billion, which have been completed. For the nine months ended September 30, free cash flow was $2.74 billion. With a Dividend Cushion ratio well below parity, we remain cautious on UPS’ dividend payout. Shares yield 6.5% at the time of this writing.


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