The pursuit of yield, one observes, has become a vulgar spectacle. When a stock dares to offer a dividend exceeding five percent, the more sensible investor should, naturally, suspect a concealed deficiency. Yet, the herd, ever eager for a palliative to the anxieties of modern finance, rushes in where angels fear to tread. It is not necessarily a sign of impending doom, merely a testament to the prevailing credulity. One finds oneself, reluctantly, examining two such cases: United Parcel Service and Verizon Communications. Their elevated yields are, shall we say, a conversation starter.
United Parcel Service
UPS, that tireless engine of consumerism, currently distributes a dividend yielding 5.6 percent. Five times the pittance offered by the broader market, a fact which, one suspects, is less a triumph of fiscal prudence than a reflection of general market apathy. The share price, one notes with mild approval, has enjoyed a recent uptick—a mere 19 percent thus far in 2026—presumably due to the insatiable demands of online shoppers. The company’s fourth-quarter pronouncements, predictably, exceeded expectations, with adjusted earnings of $2.38 per share. A triumph, naturally, trumpeted from every rooftop. Revenue guidance for 2026, at $89.7 billion, also exceeded the prognostications of the so-called analysts. The stock, predictably, rallied. One anticipates a further, temporary, elevation.
The payout ratio, hovering at a precarious 100 percent, remains a cause for mild concern. UPS, however, is focusing on “high-value deliveries” and “strengthening margins”—buzzwords, naturally, employed to distract from the underlying realities. Global economic conditions, of course, remain unpredictable, but for the long-term investor—that increasingly rare specimen—it represents a relatively safe, if uninspiring, proposition. The dividend, at least, appears sustainable, for the time being.
Verizon Communications
Verizon, purveyor of wireless connectivity and endless contracts, offers an even more generous yield—around 6 percent. The share price has also enjoyed a modest revival—15 percent this year—presumably due to the calming influence of solid quarterly results. The company’s fourth-quarter performance, one is informed, was encouraging. Wireless subscriber growth, apparently, reached a six-year high. A cause for celebration, no doubt, amongst the marketing department. Projected earnings per share for 2026—at least $4.90—also exceeded analyst expectations. The new CEO, Dan Schulman, is apparently working on improving profitability. A commendable, if belated, initiative.
The payout ratio, a remarkably conservative 50 percent, suggests a degree of fiscal responsibility rarely encountered in this era of rampant speculation. Verizon, it seems, is showing “encouraging signs of progress.” Investors, predictably, are being “won over.” This trend, one suspects, will continue, at least until the next quarterly disappointment. A solid income stock, perhaps, for those who have exhausted all other avenues of financial desperation.
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2026-02-10 20:04