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Brown Cafe UPS Forum
UPS Union Issues
Is UPS just a poor negotiator?
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<blockquote data-quote="Catatonic" data-source="post: 845572" data-attributes="member: 7966"><p>It seems some people are not aware of how 401k and pension funding is provided.</p><p></p><p>A company (say UPS) must be able to make capital investments to just maintain their infrastructure (UPS has a lot of it) and they must be able to pay dividends in order for shareholders (mostly 401k and pension investment holders) to continue to hold their stock. UPS is not paying dividends high enough now to justify continued ownership by this large institutional holders of the stock based on its potential growth. Last time I checked UPS was paying about 2.8 percent dividends per year and they need to be paying 4% of higher. Dividends are paid out of profits.</p><p></p><p>Most of my investments are already in companies that pay a minimum of 4% yield on dividends, have not reduced their dividends in the last thirty years and have a beta of .85 or lower.</p><p></p><p>When I retire, all my stock investments will have these qualification or I will sell them. UPS is at the cusp of some very hard decisions over the next few years in order to retain their viability as a desirable stock investment. Being in the S&P provides some protection but UPS is yet to reach the profitability it was at in 2006 and may never again.</p><p>Luckily the higher level Union people understand this (or have advisors that do) ... 2013 should be interesting.</p><p></p><p>I don't have any insight but UPS long term strategy could be to reduce the % of its overall workforce in Union hourly and higher paid management employees.</p><p>The obvious place to do that is in the UPS Ground operations with the less profitable packages (residential, rural and single package stops).</p><p></p><p>Just my observations from the sidelines.</p></blockquote><p></p>
[QUOTE="Catatonic, post: 845572, member: 7966"] It seems some people are not aware of how 401k and pension funding is provided. A company (say UPS) must be able to make capital investments to just maintain their infrastructure (UPS has a lot of it) and they must be able to pay dividends in order for shareholders (mostly 401k and pension investment holders) to continue to hold their stock. UPS is not paying dividends high enough now to justify continued ownership by this large institutional holders of the stock based on its potential growth. Last time I checked UPS was paying about 2.8 percent dividends per year and they need to be paying 4% of higher. Dividends are paid out of profits. Most of my investments are already in companies that pay a minimum of 4% yield on dividends, have not reduced their dividends in the last thirty years and have a beta of .85 or lower. When I retire, all my stock investments will have these qualification or I will sell them. UPS is at the cusp of some very hard decisions over the next few years in order to retain their viability as a desirable stock investment. Being in the S&P provides some protection but UPS is yet to reach the profitability it was at in 2006 and may never again. Luckily the higher level Union people understand this (or have advisors that do) ... 2013 should be interesting. I don't have any insight but UPS long term strategy could be to reduce the % of its overall workforce in Union hourly and higher paid management employees. The obvious place to do that is in the UPS Ground operations with the less profitable packages (residential, rural and single package stops). Just my observations from the sidelines. [/QUOTE]
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Is UPS just a poor negotiator?
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