Why Buying Brown Can Make You A Lot Of Green – This Shipping Giant Is On The Verge Of Achieving Dividend Aristocrat Status

Passive income investors prize reliability and yield because it's hard to live off dividend income that is inconsistent in terms of payout size or regularity. That's why stocks achieving dividend aristocrat status are frequently found in passive income portfolios. Shipping giant UPS, also known simply as "Brown" due to its trucks' color, has been paying investors for so long that it's on the verge of becoming royalty.

What is a dividend aristocrat? It is an unofficial but meaningful title that companies achieve only by meeting rigid standards, which include:

·      Membership in the S&P 500

·      Minimum $3 billion market cap

·      25 consecutive years of paying increased investor dividends

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According to Insider Monkey, the Sure Dividend website and public filings, only 67 of the roughly 6,000 stocks currently trading on the NYSE and Nasdaq exchanges have achieved dividend aristocrat status. So, you are looking at a group of high-performing companies that account for only 1-1.5% of publicly traded stocks in the U.S. That's why achieving this status is such an accomplishment. It's also why passive income investors love them so much.

UPS (NYSE: UPS) stands for United Parcel Service, one of the world's largest shipping and logistics companies. Its signature brown trucks and matching drivers' uniforms are common sights in almost every city in the country. The company's roots stretch back to Seattle, Washington, in 1907, when teenagers Claude Ryan and Jim Casey borrowed $100 to form the American Messenger Company, later known as UPS.

UPS expanded its operations nationwide until 1975, when it became the first private package delivery company (per the UPS website) to serve every address in the continental United States. UPS innovations continued in 1985 when it became the first company to deliver packages overnight to any address in the continental United States, Hawaii and Puerto Rico.

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By 1989, UPS had expanded its operations worldwide and even operated its private airline to handle the company's massive shipping volume. The company moved to its current home in Atlanta, Georgia, in 1994 and went public in 1999. UPS remains a global leader in shipping and logistics and its sizable market share in this lucrative sector has paid off in spades for investors.

According to Benzinga's latest estimates, UPS stock is trading at $128.76, with a market cap of $110 billion. More importantly to passive income investors, UPS is on a 22-year streak of increasing investor dividends. In other words, UPS has been paying off since the start of Operation Iraqi Freedom during the George W. Bush Administration.

Currently, UPS's dividend yield is a solid 5.06%, which translates to a healthy $6.51 per share in passive income. Whether UPS will achieve dividend aristocrat status remains to be seen because maintaining a 5.06% yield and topping it for the next three consecutive years will be a challenge. Nevertheless, UPS has been delivering packages to customers for over 100 years and increasing investor payouts since 2002. That means you could probably make some good green from buying stock in "brown." 

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Arrived Achieved A Total Return of 34.7% On Their Biggest Sale Yet — Diversify Your Monthly Income Stream With Fractional Real Estate

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In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales.

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