Coca-Cola (NYSE: KO) is one of the most reliable dividend stocks out there. And it’s been on a tear, too — hitting a fresh all-time high on Friday after reporting strong earnings. With a yield of 2.9%, Coke is an excellent choice for reliable passive income. However, there are plenty of other options to add to a diversified income-producing portfolio.
Here’s why United Parcel Service (NYSE: UPS), Devon Energy (NYSE: DVN), and Air Products & Chemicals (NYSE: APD) are three dividend stocks to buy now.
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UPS continues to test investor patience
Daniel Foelber (UPS): UPS is down over 30% in the past year and 45% from its all-time high. The stock is now hovering around a four-year low. And unfortunately, a great deal of the sell-off is justified.
UPS’ results have been awful. Revenue growth is negative. Operating margin has plummeted into the single digits. And to top it all off, UPS just lowered its guidance for full year 2024. It is now forecasting $93 billion in consolidated revenue, an adjusted operating margin of 9.4%, $4 billion in capital expenditures, and $500 million in stock buybacks. In the first quarter of 2024, UPS reaffirmed its prior targets, which called for $92 billion to $94.5 billion in consolidated revenue, an operating margin of 10% to 10.6%, and $4.5 billion in capital expenditures.
Anytime a company reports a bad quarter and revises its guidance down, there’s a good chance Wall Street is going to be unhappy. But UPS has built a habit of overpromising and underdelivering over the last few years, starkly contrasting the early part of the COVID-19 pandemic when it was blowing expectations out of the water.
In March, UPS gave an investor presentation discussing its big plans for a turnaround and a return to growth by 2026 — including $108 billion to $114 billion in revenue and higher margins. The event was an opportunity for UPS to reset expectations. But so far, UPS is moving in the opposite direction. How can investors expect UPS to hit its three-year goals if it can’t even get a handle on its near-term estimates?
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