Core Insights - The article emphasizes the importance of dividends in investment strategies, highlighting that even renowned investors like Warren Buffett recognize their value, despite Berkshire Hathaway not paying dividends [1] Company Summaries - **Pfizer**: Pfizer has a recent dividend yield of 7.1%, with total annual dividends increasing from $1.20 in 2016 to $1.70 recently. Despite poor stock performance averaging annual gains of 1.84% over the past decade, the company has a promising drug pipeline and a low forward P/E ratio of 8.3 compared to its five-year average of 10.2 [4] - **Caterpillar**: Caterpillar offers a dividend yield of 1.56%, above the S&P 500's yield of approximately 1.25%. The company has shown solid long-term performance with average annual gains of 17.6% over the past decade, and its total annual dividend has grown from $3.28 in 2018 to $5.64 recently [5] - **United Parcel Service (UPS)**: UPS has a dividend yield of 6.5%, with total payouts increasing from $3.64 in 2018 to $6.54 recently. The stock has had an average annual gain of 4.24% over the past decade, although growth has slowed recently due to economic uncertainties and competition from Amazon [6][7] - **Chevron**: Chevron's recent dividend yield stands at 4.78%, with total annual payouts rising from $4.76 in 2019 to $6.68 recently. The stock has averaged 14.2% annual growth over the past five years, supported by significant share buybacks and diversification in energy production and refining [8] ETF Considerations - The article suggests considering dividend-focused ETFs for investment, listing several options with their recent yields and average annual returns: - iShares Preferred & Income Securities ETF (PFF): 6.68% yield, 5-year average return of 3.22% - Schwab U.S. Dividend Equity ETF (SCHD): 3.97% yield, 5-year average return of 13.34% - Fidelity High Dividend ETF (FDVV): 3.02% yield, 5-year average return of 17.91% - Vanguard High Dividend Yield ETF (VYM): 2.86% yield, 5-year average return of 14.60% [9]

Dividend Stocks Overview - Dividend yield is a key metric for investors, indicating how much a company pays in annual dividends relative to its stock price [1] - The sustainability of a company's dividend yield is often assessed through its dividend payout ratio, which shows the percentage of net income distributed as dividends [1][3] - A high dividend yield may result from a declining stock price, which could indicate underlying issues [2] Altria Group (MO) - Altria Group has a dividend yield of 6.83% and an annual dividend of $4.08, with a payout ratio of 68.34% [5][6] - The company has a strong track record of 56 consecutive years of dividend increases and an annualized 3-year dividend growth of 4.35% [5][8] - Despite the decline in traditional tobacco smoking, Altria is pivoting towards alternative nicotine products, which may support future revenue and earnings growth [7] - The stock has delivered a total return of over 609% in the last 15 years, and its current P/E ratio of 9x indicates it is undervalued compared to its historical performance [6][7] United Parcel Service (UPS) - UPS has a dividend yield of 6.88% and an annual dividend of $6.56, with a high payout ratio of 95.63% [9][10] - The company has a history of maintaining dividends even during economic downturns, with a cash flow payout ratio of 66% [10] - UPS is undergoing a turnaround plan that is expected to improve margins, and its P/E ratio is around 14x, which is a discount to historical averages [11] Verizon Communications (VZ) - Verizon has a dividend yield of 6.25% and an annual dividend of $2.71, with a payout ratio of 64.52% [12][14] - The company has a 20-year track record of dividend increases, but its recent total return over 10 years is only 45.22% [13][14] - Verizon is facing challenges with subscriber losses but has received FCC approval for a deal to acquire Frontier, which may enhance its competitive position [13][14]

Core Viewpoint - UPS shares have dropped over 50% from their 2022 high, but the stock is viewed as a strong long-term investment opportunity due to its high dividend yield and potential for recovery [1]. Group 1: Reasons for Stock Decline - UPS stock experienced significant growth of nearly 150% from March 2020 to January 2022 due to increased package delivery volumes during the COVID-19 pandemic [4]. - The post-pandemic period saw a slowdown in UPS' business, compounded by challenging negotiations with the Teamsters Union, which affected profits despite avoiding a strike [5]. - UPS announced plans to cut its Amazon shipment volume by over 50% by 2026, leading to further declines in stock price, as Amazon accounted for 11.8% of UPS' total revenue in 2024 [6]. Group 2: Recovery and Growth Potential - UPS reported a 4.2% year-over-year increase in earnings for Q1 2025, indicating recovery as the higher costs from the Teamsters Union contract were front-loaded [8]. - The company is restructuring its network to cut approximately $3.5 billion in costs this year while focusing on more profitable shipment areas such as healthcare, international, B2B, and SMB markets [9][10]. - Despite uncertainties from tariffs affecting shipment volumes from China, UPS anticipates that these will be offset by increased shipments from China to non-U.S. destinations and other international routes [11]. Group 3: Investment Rationale - The demand for package deliveries is expected to grow over the next decade, supported by UPS' extensive delivery network, which provides a competitive advantage [12]. - UPS offers a forward dividend yield of 6.58%, which is attractive for generating total returns, although there is a possibility of a dividend cut [13]. - The stock is currently trading at 14.6 times forward earnings, a historically low valuation for the company, making it an appealing investment opportunity [13].