Better Dividend Stock: Whirlpool vs. UPS
Whirlpool has significant debt and near-term headwinds to overcome.
UPS also faces near-term headwinds, and that will pressure its dividend cover.
The 6.8% dividend yield of UPS (NYSE: UPS) stock and the 9.1% dividend yield of Whirlpool (NYSE: WHR) stock are obviously attractive for passive income-seeking investors. However, there's no such thing as a free lunch, and their yields reflect some doubt in the marketplace around the sustainability of their dividends. That said, which stock is better, and what risks do you need to know about before buying the stock?
Both Whirlpool's and UPS' shares are down heavily this year, as they've both suffered a deterioration in their trading conditions.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
For Whirlpool, it comes down to a combination of stubbornly high interest rates and competitor behavior in light of President Donald Trump's reelection. Relatively high interest rates curtail the housing market and, in turn, discretionary demand (which tends to be higher-margin than replacement demand) for housing appliances. Consequently, Whirlpool's first-quarter organic sales rose just 2.2% year over year, with organic sales flat in its key major domestic appliance North America business.
Whirlpool's sales were also highly likely affected by competitor behavior in the fourth quarter of 2024 and the first quarter of 2025. CEO Marc Bitzer said on the recent earnings call: "Asian appliance producers significantly increased imports into the U.S. ahead of the tariffs in the first quarter and fourth quarter, essentially loading the U.S. industry. This market disruption will likely continue into Q2 as competitors attempt to sell through their inventory."
With the first and second quarters negatively affected by such actions, 30-year mortgage rates still above 6.5%, and general uncertainty in the economy concerning tariffs, this casts some doubt on management's decision to maintain its full-year guidance.
Whirlpool's full-year guidance implies that its dividend is sustainable. For example, the guidance calls for sales of $15.8 billion with an ongoing earnings before interest and tax (EBIT) margin of 6.8%, implying an ongoing EBIT of $1.07 billion, dropping down to $500 million to $600 million in free cash flow (FCF). That's more than enough to cover the the $384 million in dividends that Whirlpool paid last year.
That said, there's a significant risk to the dividend if Whirlpool falters this year. The company has $4.8 billion in long-term debt and $1.85 billion in debt maturing this year, of which it plans to pay down $700 million and refinance $1.1 billion to $1.2 billion. Any significant deterioration in the FCF outlook may cause management to cut the dividend to shore up its balance sheet, not least in paying down debt.
Continuing the theme of looking at dividend sustainability, UPS management is clear on three things regarding the matter:
Its longstanding aim is to pay out 50% of its earnings in dividends, and it's committed to sustaining and growing the dividend
The current dividend of $6.56 per share is barely covered by the Wall Street analyst consensus for UPS earnings in 2025 of $7.11, implying a payout ratio of 92%
Management expects $5.7 billion in FCF in 2025, barely covering the $5.5 billion cash dividend
Whether you look at the payout ratio in terms of earnings (as management does) or FCF, UPS' ability to pay its dividend is beginning to look stretched. At the same time, UPS management is trying to finesse a 50% reduction in Amazon.com delivery volume by the second half of 2026, while dealing with a deteriorating demand environment. This could cloud UPS' ability to generate earnings and cash flow over the near term.
In its key U.S. domestic market, the decline in its average daily volume (ADV) in February and March was "higher than we expected," according to CEO Carol Tome on the earnings call. Moreover, UPS guidance for the second quarter calls for a U.S. domestic year-over-year ADV decline of 9%. Management declined to update its full-year guidance.
On balance, UPS' dividend looks more sustainable than Whirlpool's, so it wins the contest. UPS has $19.5 billion in long-term debt, which looks manageable compared to guidance for $5.7 billion in FCF in 2025. Whirlpool's $4.8 billion in long-term debt is far higher than its estimated FCF of $500 million to $600 million in 2025.
However, there's a good chance both could cut their dividends by the end of the year. That doesn't mean they are unattractive stocks; it just means anyone buying in for the dividend alone needs to prepare for potential disappointment.
Before you buy stock in United Parcel Service, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $701,781!*
Now, it's worth noting Stock Advisor's total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of April 28, 2025
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends United Parcel Service and Whirlpool. The Motley Fool has a disclosure policy.
Better Dividend Stock: Whirlpool vs. UPS was originally published by The Motley Fool

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
Philippines goods to face 19% tariff, Trump says
The US will levy a 19% tax on imports from the Philippines, US President Donald Trump has announced after meeting with the country's president at the White House. Trump wrote on social media on Tuesday that the new tariff was part of a wider pact, in which the Philippines would remove duties on US goods and the two countries would cooperate militarily. "It was a beautiful visit, and we concluded our Trade Deal," he wrote on social media, offering no further details about the apparent agreement. The plan, which was not confirmed by the Philippines, would leave the country facing a tax even higher than what Trump had threatened when he first announced sweeping global tariffs in April. At the time, Trump said his goal with instituting tariffs was to push countries to drop policies he saw as unfair to the US. His plans set off a flurry of trade talks with countries around the world. He has since announced a handful of deals, including with the UK, China and Indonesia. But the agreements so far have kept in place high tariffs, with key issues unresolved or unconfirmed by both parties. With Trump now threatening a new round of higher duties to go into effect 1 August, some of America's biggest and most important trade partners, including the European Union and Canada, remain in limbo. As hopes for a deal dim, officials in Europe are increasingly rallying around plans for potential retaliation. In Canada on Tuesday, Prime Minister Mark Carney said that "complex negotiations" were continuing but was noncommittal on the prospect of reaching a deal by Trump deadline next week. "We'll see," he told reporters after meeting with premiers in Ontario. "The Americans objectives are multiple, they change over time ... but what is clear is that the Canadian government will not accept a bad agreement. The objective is not to have an agreement at any cost." Trump's tariff plans sparked widespread financial turmoil when he announced them originally in April, putting forward a plan that would leave the US with its highest duties since the early 1900s. He subsequently suspended some of the plan's most aggressive measures, while leaving in place a universal 10% tariff on most goods and separately hitting certain items, such as cars, copper, steel and aluminium, with higher duties. But in recent weeks, as markets have calmed and the US economy held steady, Trump has returned to plans for higher duties, sending letters to countries outlining plans for new tariffs that he says will go into force on 1 August. In a letter to leaders in the Philippines this month, he had said he would charge a 20% tariff on the country's goods. That was up from 17% rate he had threatened in April. In a statement on Wednesday, the Embassy of the Republic of the Philippines said the reduction in the tariff from the most recent rate threatened was "encouraging". "We will continue to find other ways to enhance and deepen our economic partnership," it said. The Philippines is a relatively small trade partner with the US, sending about $14.2bn worth of goods to the America last year. That included car parts, electric machinery, textiles and coconut oil. Meanwhile for companies, the cost of the new tariffs is increasing. General Motors on Tuesday said tariffs had cost it more than $1bn over three months. That followed an earlier disclosure from rival Stellantis, maker of Jeep, which said the measures had cost it €300m (£259.6m, $349.2m). Error while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
11 minutes ago
- Yahoo
McGraw Hill Announces Pricing of its Initial Public Offering
COLUMBUS, Ohio, July 23, 2025--(BUSINESS WIRE)--McGraw Hill, Inc. ("McGraw Hill"), a leading global provider of information solutions for education, today announced the pricing of its initial public offering of 24,390,000 shares of its common stock (the "Common Stock") at a public offering price of $17.00 per share. The shares of McGraw Hill's Common Stock are expected to begin trading on the New York Stock Exchange under the ticker symbol "MH" on July 24, 2025, and the offering is expected to close on July 25, 2025, subject to customary closing conditions. McGraw Hill will receive proceeds of approximately $385,697,545 million after deducting underwriting discount and commissions and estimated offering expenses and intends to use the net proceeds from the offering to repay a portion of the outstanding borrowings under its term loan credit facility. In addition, the selling stockholder identified in the registration statement has granted the underwriters a 30-day option to purchase up to an additional 3,658,500 shares (solely to cover over-allotments, if any) of McGraw Hill's Common Stock at the initial public offering price, less underwriting discounts and commissions. McGraw Hill will not receive any proceeds from the sale of shares by the selling stockholder if the underwriters exercise their option to purchase additional shares of Common Stock. Goldman Sachs & Co. LLC is acting as book-running manager for the proposed offering and as representative of the underwriters for the proposed offering. BMO Capital Markets, J.P. Morgan, Macquarie Capital, Morgan Stanley, Deutsche Bank Securities, and UBS Investment Bank are acting as bookrunners for the proposed offering. Baird, BTIG, Needham & Company, Rothschild & Co, Stifel, and William Blair are acting as co-managers for the proposed offering. The proposed offering is being made only by means of a prospectus. Copies of the prospectus relating to the offering may be obtained from: Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, NY 10282 (Tel: 866-471-2526) or by e-mail at prospectus-ny@ A registration statement relating to the Common Stock has been filed with, and was declared effective by, the U.S. Securities and Exchange Commission on July 23, 2025. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Common Stock, nor shall there be any sale of the Common Stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. About McGraw Hill McGraw Hill is a leading global provider of education solutions for preK-12, higher education and professional learning, supporting the evolving needs of millions of educators and students around the world. We provide trusted, high-quality content and personalized learning experiences that use data, technology and learning science to help students progress towards their goals. Through our commitment to fostering a culture of innovation and belonging, we are dedicated to improving outcomes and access to education for all. We have over 30 offices across North America, Asia, Australia, Europe, the Middle East and South America, and make our learning solutions available in more than 80 languages. View source version on Contacts Investors:Danielle Zack Media:Tyler Reed(914) Cathy McManus(646) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


Business Wire
12 minutes ago
- Business Wire
Rosen Law Firm Urges Broadmark Realty Capital Inc. (NYSE: BRMK) Stockholders to Contact the Firm for Information About Their Rights
NEW YORK--(BUSINESS WIRE)--Rosen Law Firm, a global investor rights law firm, announces that a shareholder filed a class action on behalf of persons and entities who held common stock of Broadmark Realty Capital Inc. (NYSE: BRMK) as of the record date of the May 30, 2023 Merger (the 'Merger Date') between Broadmark and Ready Capital Corporation. Broadmark describes itself as a 'real estate investment trust.' For more information, submit a form, email attorney Phillip Kim, or give us a call at 866-767-3653. The Allegations: Rosen Law Firm is Investigating the Allegations that Broadmark Realty Capital Inc. (NYSE: BRMK) Misled Investors Regarding its Business Operations. According to the lawsuit, the Complaint alleges that the proxy statement used to solicit the support of Broadmark shareholders for the Merger contained false and/or misleading statements and/or failed to disclose that: (1) a material portion of borrowers within Ready Capital's originated portfolio were experiencing significant financial distress due to high interest rates that had increased their borrowing costs; (2) an oversupply of multifamily properties in Ready Capital's markets of operation had severely limited the ability of Ready Capital borrowers to raise their rents by the amounts necessary to cover their growing debt costs; (3) a major development project acquired in Ready Capital's acquisition of Mosaic Real Estate Credit, LLC, Mosaic Real Estate Credit TE, LLC, and MREC International Incentive Split, LP (a Ritz-Carlton located in Portland, Oregon), which accounted for approximately $500 million of Ready Capital's acquired loan portfolio, had experienced catastrophic setbacks since its inception, including significant cost overruns, construction delays, and funding shortfalls; (4) as a result, Ready Capital's Current Expected Credit Loss reserves and expected credit losses were materially understated; and (5) consequently, Ready Capital's financial projections regarding Ready Capital's Distributable Earnings per share, dividends per share, and book value per share had no basis in fact when made. When the true details entered the market, the lawsuit claims that investors suffered damages. What Now: You may be eligible to participate in the class action against Broadmark Realty Capital Inc. Shareholders who want to serve as lead plaintiff for the class must file their motions with the court by July 28, 2025. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here. All representation is on a contingency fee basis. Shareholders pay no fees or expenses. About Rosen Law Firm: Some law firms issuing releases about this matter do not actually litigate securities class actions. Rosen Law Firm does. Rosen Law Firm is a recognized leader in shareholder rights litigation, dedicated to helping shareholders recover losses, improving corporate governance structures, and holding company executives accountable for their wrongdoing. Since its inception, Rosen Law Firm has obtained over $1 billion for shareholders. Follow us for updates on LinkedIn: on Twitter: or on Facebook: Attorney Advertising. Prior results do not guarantee a similar outcome.