2 Unstoppable Dividend Stocks to Buy Now With $500

United Parcel Service (NYSE: UPS) has paid a dividend faithfully since the company first held its initial public offering (IPO) in 1999. It has also consistently raised that payout through the years. Its current forward annual dividend rate is $6.52 per share.

The current yield for UPS is just shy of 5% at the time of this writing, nearly 4 times higher than the average S&P 500 stock. That yield has become increasingly attractive because the company’s share price performance has underwhelmed of late. Declines in package volume, higher operating and labor costs, and economic difficulties have weighed on the business.

It’s worth noting that UPS has consistently raised its dividend every year for the last 15 years and counting. The company also maintains a payout ratio of well over 90% of earnings, while it has brought in free cash flow of $4 billion in the trailing 12 months alone.

While the package delivery giant has struggled the last few years due to tough macro headwinds, these are short-term factors that don’t indicate an underlying issue with the company itself. Customers have also been switching to cheaper delivery options, which have weighed on UPS’ top and bottom lines. The company has worked to cut costs in response where it can, including leaning into more automation, shutting down certain locations, and even shaving its workforce.

Slowly but surely, the tide seems to be turning as these changes and hopeful shifts in the economic landscape take effect. In Q3 2024, UPS reported revenue of $22.2 billion, a 5.2% bump above the $21.1 billion it delivered in the same quarter in 2023. A more significant green flag was its bottom line, where earnings according to generally accepted accounting principles (GAAP) rose by a notable 37% from the year-ago quarter to $1.5 billion.

UPS has proven its resilience through economic thick and thin in the past, despite the cyclicality of its industry and business. Its dividend history is robust, and the company has consistently rewarded shareholders through the years. For investors looking at a minimum five-year buy-and-hold horizon, this business could be well worth scooping up some shares.

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• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $380,291!*

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See 3 “Double Down” stocks »

*Stock Advisor returns as of November 18, 2024

Rachel Warren has positions in Johnson & Johnson. The Motley Fool recommends Johnson & Johnson and United Parcel Service. The Motley Fool has a disclosure policy.

2 Unstoppable Dividend Stocks to Buy Now With $500 was originally published by The Motley Fool