3 Reasons to Hold On to United Parcel Service's Stock

Reasonable valuation, healthier balance sheet, and a dividend with room to continue growing.

Mar 3, 2014 at 8:03PM

United Parcel Service (NYSE:UPS) is a selection for the real-money Inflation-Protected Income Growth portfolio. In this brief video, portfolio manager Chuck Saletta offers three reasons he's holding on to United Parcel Service's stock despite the 26% rise since he bought those shares a little more than a year ago.

Why dividends rule
A key reason United Parcel Service made the cut for the iPIG portfolio is one of the dirty secrets that few finance professionals will openly admit: Dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true.

However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Summary:

  • Reasonable valuation, with a market cap in line with a fair-value estimate.
  • Healthier balance sheet, with a debt-to-equity ratio down to around 1.7.
  • Covered and growing dividend with a 58% payout ratio and a decent trend of dividend hikes.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

Chuck Saletta owns shares of United Parcel Service. The Motley Fool recommends United Parcel Service. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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