UPS
United Parcel Service, Inc.
Industrials · Integrated Freight & Logistics · United States · Stock
Score Breakdown
Scored for Safe Long-Term Investing profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth sub-score was low because revenue, net income, and EPS all declined year-over-year in FY2025, which the model penalized directly.
- Momentum scored weakly as the most recent quarter (2026Q1) showed a pronounced pullback in revenue, operating income, and net income relative to the prior three quarters.
- The theme component contributed no score because UPS is not currently assigned to any of the 24 tracked macro themes, which weighed on the composite total.
Why Not Higher
- The near-100% dividend payout ratio in FY2025 capped the dividend sub-score, as it signals that dividends are consuming virtually all net income and represent a sustainability risk.
- Across-the-board contraction in revenue, net income, and EPS in FY2025, combined with a sharp 2026Q1 earnings pullback, prevented higher scores in both the growth and momentum factors.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue declined from $91,070,000,000 in FY2024 to $88,661,000,000 in FY2025, a drop of 2.6%. Net income fell from $5,782,000,000 in FY2024 to $5,572,000,000 in FY2025 (-3.6%), and diluted EPS decreased from $6.75 in FY2024 to $6.56 in FY2025 (-2.8%).
The model penalized UPS for year-over-year contraction across all three key growth metrics — revenue, net income, and EPS — resulting in a low growth sub-score.
In FY2025, UPS posted a net margin of 6.3%, an operating margin of 8.9%, and a return on assets of 7.6%.
These margins reflect a modestly profitable business, and the model awarded a mid-range score recognizing positive but not exceptional profitability across all three measures.
In FY2025, UPS carried a debt-to-equity ratio of 1.45 and reported total assets of $73,090,000,000.
The model rewarded a substantial asset base while acknowledging meaningful leverage; the debt-to-equity ratio of 1.45 in FY2025 indicates that debt exceeds equity but remains within a range the model treats as manageable for a large-scale logistics operator.
Over the last four quarters, revenue moved from $21,221,000,000 in 2025Q2 to $21,415,000,000 in 2025Q3, peaked at $24,479,000,000 in 2025Q4, then fell sharply to $21,202,000,000 in 2026Q1. Operating income followed a similar pattern — $1,822,000,000, $1,804,000,000, $2,575,000,000, and $1,267,000,000 — while net income dropped to $864,000,000 in 2026Q1 after reaching $1,791,000,000 in 2025Q4.
The model registered weak momentum because the most recent quarter (2026Q1) showed a pronounced pullback in revenue, operating income, and net income relative to the prior three quarters, suggesting deceleration rather than sustained improvement.
UPS's dividend payout ratio in FY2025 was 96.9%, and dividends per share have risen from $6.08 in FY2022 to $6.48 in FY2023, $6.52 in FY2024, and $6.56 in FY2025.
The model recognized a consistent, slowly growing dividend stream, but the near-100% payout ratio in FY2025 signals that dividends are consuming virtually all net income, which the model likely treated as a sustainability risk and capped the score accordingly.
UPS is not currently assigned to any of the 24 tracked macro themes.
Because no macro theme assignment exists for this security at this time, the theme component contributed no score; this reflects the current classification status and is not an indicator of the company's overall quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
UPS posted a composite score of 40.8/100 and carries a Monitor Only label, reflecting broad-based deterioration across its key financial metrics. Revenue declined from $91,070,000,000 in FY2024 to $88,661,000,000 in FY2025 (-2.6%), while net income and diluted EPS also contracted year-over-year. Profitability remains modestly positive with a 6.3% net margin and 8.9% operating margin, but a near-100% dividend payout ratio and a sharp pullback in 2026Q1 results underscore meaningful sustainability and momentum concerns.
Plain English
UPS is a large, established delivery company that is currently shrinking — revenue, profits, and earnings per share all fell last year — and it is paying out almost every dollar it earns as dividends, which raises questions about whether that dividend can keep growing.
Bull Case vs. Bear Case
Bull Case
- UPS maintains a substantial asset base of $73,090,000,000 and a debt-to-equity ratio of 1.45 that the model treats as manageable for a large-scale logistics operator, suggesting financial stability is not immediately threatened.
- The company has delivered a slowly but consistently rising dividend, growing from $6.08 per share in FY2022 to $6.56 in FY2025, demonstrating a multi-year commitment to returning cash to shareholders.
- Operating and net margins remain positive — 8.9% and 6.3% respectively in FY2025 — indicating the core business continues to generate meaningful profit despite top-line pressure.
Bear Case
- All three primary growth metrics contracted in FY2025: revenue fell 2.6%, net income fell 3.6%, and diluted EPS fell 2.8%, signaling broad-based deterioration rather than an isolated setback.
- The dividend payout ratio reached 96.9% in FY2025, meaning virtually all net income is being consumed by dividends, leaving little room for reinvestment or cushion if earnings decline further.
- Quarterly momentum is weak: revenue dropped to $21,202,000,000 in 2026Q1 from a peak of $24,479,000,000 in 2025Q4, and net income fell to $864,000,000 in 2026Q1 from $1,791,000,000 in 2025Q4, pointing to sharp deceleration entering the new fiscal year.
What Could Change the Picture
Bullish Triggers
- A sustained reversal in quarterly revenue and operating income trends — particularly if 2026Q2 results show a meaningful recovery from the 2026Q1 pullback — would signal that the deceleration was temporary rather than structural.
- A reduction in the payout ratio, achieved through earnings growth rather than a dividend cut, would indicate improving financial flexibility and reduce the sustainability risk flagged by the near-100% payout.
Bearish Triggers
- If the 2026Q1 weakness in net income and operating income deepens in subsequent quarters, the already-strained payout ratio could become untenable, potentially forcing a dividend reduction.
- Continued year-over-year revenue contraction beyond FY2025 would further pressure margins and could erode the financial health cushion provided by the current asset base.
Risk Profile
Low RiskUPS carries a debt-to-equity ratio of 1.45 against a total asset base of $73,090,000,000, a leverage level the model treats as manageable but not negligible. The sharp drop in net income to $864,000,000 in 2026Q1 — well below the $1,791,000,000 recorded in 2025Q4 — adds near-term earnings risk that could stress the already-stretched dividend coverage.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.