4 Reliable Dividend Stocks, Led by UPS, to Build Lifetime Passive Income
Wall Street spent years dismissing UPS as a broken dividend story, but a fresh earnings beat changed the conversation. These four NYSE stocks now combine rising cash flow with long payout histories, and the weakest coverage ratio among them may…
For much of the past five years, Wall Street treated United Parcel Service (NYSE:UPS | UPS Price Prediction) as a broken dividend story. Then the package carrier posted its fourth consecutive top- and bottom-line beat and raised its full-year guidance. Three other income names also have fresh operating momentum: a pharma compounder, an oil major, and a monthly-paying REIT. All four trade on the NYSE, and each combines a dividend covered by cash flow with a long payout record. Below is how safe each payment looks and what it could mean for your income.
UPS: An Ultra-High Yield With Coverage Rebuilding
UPS pays a quarterly dividend of $1.64, or $6.56 per year. At a recent price of $105.05, that’s a forward yield of about 6.24%, putting UPS in ultra-high-yield territory.
Dividend safety: Management now expects full-year adjusted free cash flow of about $6.1 billion, against planned dividend payments of around $5.4 billion. Year-to-date free cash flow reached $4.2 billion even after one-time Driver Choice buyout payments, compared with $4.1 billion in dividends paid so far. UPS ended the quarter with $6.8 billion in cash and no outstanding commercial paper. The annual dividend equals about 90% of the $7.28 adjusted EPS guidance, which is a tight margin. Still, CFO Brian Dykes told analysts on the call, “So clearly our dividend is safe and secure.” UPS has paid a dividend every quarter on record back to 1999, and the quarterly rate rose from $0.17 in 2000 to its current level.
For the bull case, third-quarter adjusted EPS came in at $1.69, beating the $1.62 estimate, on revenue of $22.85 billion (up 6.7% year over year). The U.S. Domestic segment’s adjusted operating margin expanded to 7.0% from 6.4%. Management also said the Driver Choice cash requirement will end next year, removing a drag on free cash flow. The stock trades at about 13x forward earnings.
Caveat: The board has kept the quarterly payout at $1.64 through 2025 and 2026, so annual raises are on hold while coverage recovers.
AbbVie: Pharma Income With Room to Grow the Check
AbbVie (NYSE:ABBV) yields 2.30%. The starting yield is modest, but the payout grows quickly.
Dividend safety: The $1.73 quarterly dividend is about 50% of the low end of the company’s adjusted EPS guidance of $13.87 to $14.07. The 3.52% free cash flow yield is higher than the dividend yield. Interest coverage stands at 6.94x, and net debt to EBITDA is 2.26x. The dividend has grown every year, from $0.40 per quarter in 2013 to $1.73 in 2026.
Bull case: Second-quarter revenue rose 10.2% to $16.99 billion. The two drugs replacing Humira did the heavy lifting: Skyrizi sales rose 24.4% to $5.51 billion, and Rinvoq grew 24.5% to $2.53 billion. Management has raised its revenue guidance by $600 million since the start of the year, and the shares are up 29.59% year to date.
Caveat: The pending $10.9 billion Apogee Therapeutics (NASDAQ:APGE) acquisition will be funded with new long-term debt and adds $0.14 of dilution to 2026 EPS. The company remains committed to a net leverage ratio of two times within two to three years of closing.
Chevron: A Fortress Balance Sheet Behind the Payout
Chevron (NYSE: CVX) yields 2.85% and pays a quarterly dividend of $1.78.
Dividend safety: Chevron generated $18.10 billion of free cash flow in the second quarter and still cut total debt by $8.41 billion. Debt-to-equity stands at 0.22, net debt to EBITDA at 0.94x, and interest coverage at 13.70x. Trailing dividends equal about 67% of trailing EPS. The quarterly rate has grown every year from $1.19 in 2019 to $1.78 in 2026. CEO Mike Wirth said the acquired Hess assets are producing free cash flow “roughly double the incremental dividends.”
Bull case: Production rose 20% year over year to 4,070 MBOED. Chevron reached $3 billion in annual structural cost cuts six months ahead of schedule. It also signed a 20-year power agreement with Microsoft. The deal covers 2.67 GW for West Texas data centers, which management says will produce cash flows “independent of commodity price cycles.” The shares are up 55.51% year to date.
Caveat: Brent averaged $104 per barrel in the second quarter, compared with $68 a year earlier. If oil prices fall back, today’s record free cash flow will shrink.
Realty Income: Monthly Checks and a Rising AFFO Outlook
Realty Income (NYSE:O) is the high-yield anchor of this group at 5.43%, and it pays every month. The latest dividend is $0.2715 per share, and the next ex-dividend date is this Friday.
Dividend safety: Realty Income’s annualized dividend is $3.252. That equals about 73% of the low end of its raised $4.44 to $4.45 guidance for AFFO (adjusted funds from operations, the main cash earnings measure for REITs). Occupancy is 98.8%, Fitch rates the company “A” with a stable outlook, and pro forma liquidity tops $5.7 billion. The second-quarter payment marked the 115th consecutive quarterly dividend increase. The company had declared 670 consecutive monthly dividends as of its first-quarter disclosure.
Bull case: Realty Income committed about $2.6 billion in the second quarter at a 7.3% initial cash yield. It raised its investment-volume guidance to $10.0 billion and added a $6 billion hyperscale data center joint venture. The stock has lagged, falling 1.75% over the past year, and trades at 1.36 times book value.
Caveat: 65.7% of annualized base rent comes from tenants without investment-grade credit ratings, so a consumer slowdown could push credit losses higher.
Four Paychecks Built on Cash Flow
UPS has the biggest yield and the most to prove, with its coverage improving as transformation costs roll off, while AbbVie and Chevron pay less today but have the best coverage and the steadiest record of raises. Realty Income adds a monthly check backed by an A rating and a rising AFFO outlook. In all four cases, the latest results show more cash coming in to support the dividend.
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
