Here's How Many Shares of UPS You Should Own to Get $1,000 in Yearly Dividends

It's always good to receive dividend payments, and it's particularly nice when markets are volatile, like they are now.

United Parcel Service (NYSE: UPS) has paid a dividend for more than a quarter of a century. How many shares would you have to own to receive $1,000 in yearly payments?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Dividend support

UPS raised its quarterly payout by a penny, to $1.64 per share, earlier this year. The board of directors has paid dividends since its 1999 initial public offering and raised them annually since 2010.

Nonetheless, despite this track record, it's imperative for investors to make sure companies have the wherewithal to sustain dividends. Last year, UPS had free cash flow (FCF) of $6.2 billion compared to dividends of $5.4 billion. Management expects to produce FCF of $5.7 billion this year while paying out $5.5 billion in dividends.

The company notes the importance it places on dividends. UPS currently has a cushion to sustain the payments, but that's expected to narrow. Hence, investors should keep an eye out to check if that changes.

Share calculation

Turning to some basic math calculations, paying $1.64 per share every three months works out to an annual dividend of $6.56 per share. To receive $1,000, you would have to own 153 shares.

The stock closed at $100.12 on April 3. That means you would have to invest about $15,300, assuming dividends stay constant. If the board of directors continues to hike payments, you'll receive higher dividend totals in future years, and a cut will result in lower payments.

UPS stock has an enticing 6.6% dividend yield, about five times the S&P 500's 1.3%.

Should you invest $1,000 in United Parcel Service right now?

Before you buy stock in United Parcel Service, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 1, 2025

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.