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By Swissquote Analysts
Published on 02.02.2022
Morning news

UPS Raises Dividend 49% as Fourth-Quarter Profit and Revenue Surge

Topic of the day

United Parcel Service Inc. is making more money shipping fewer packages, and rewarding investors with a meatier dividend payout. The delivery company on Tuesday boosted its quarterly dividend by 49%, or 50 cents a share, the largest increase since the company's public-markets debut in 1999. The planned per-share payout of $1.52 reflects the company's new policy under Chief Executive Carol Tomé to return half of earnings to shareholders through its dividend. UPS's dividend is payable March 10 to shareholders of record on Feb. 22. With the higher rates, UPS is generating profit margins not seen in years. In its domestic segment, the adjusted operating margin of 12.2% was the highest for the fourth-quarter since 2013, according to BMO Capital Markets. Excluding charges including those tied to restructuring efforts, per-share earnings were $3.59, compared with $2.66 a year earlier. Analysts projected earnings of $3.10 a share. Revenue came in at $27.78 billion, compared with analysts' estimates of $27.06 billion. The company projects that it will reach $102 billion in revenue this year and post an adjusted operating margin of 13.7%. It plans to spend $5.5 billion on capital expenditures. Shares of United Parcel Service rose by $28.48, or 14,1%, to finish at $230.69—a record.

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Swiss stocks

The Swiss stock market continued its upward trend on Tuesday. The main reason was UBS, which increased by 8.0 percent after the results for 2021. Shareholders will participate through a higher dividend and further share buybacks. The drop in pre-tax profit in the final quarter was due to a provision for legal expenses. Without this provision, an increase of 24 percent would have been recorded. In the wake of this, CS Group rose by 1.3 per cent. The SMI gained 1.1 per cent to 12,360 points. Among the 20 SMI stocks, there were 14 price gainers and six losers. 51.34 (previously: 41.37) million shares were traded. Novartis gained 1.2 per cent. According to an agency report, the financial investors Blackstone and Carlyle have set their eyes on the generics division of Novartis. As Bloomberg reports, the investors are currently talking about making a joint bid for Sandoz. The division could be valued at around $25 billion. Novartis has not yet made a final decision on whether to sell or spin off the subsidiary. SIG shares lost 5.8 per cent after the billion-dollar purchase of Scholle IPN. Zur Rose shares were down 6.8 per cent.

International markets


European stocks climbed Tuesday for a two-session winning streak as investors regained some confidence after a period of uncertainty. The Stoxx Europe 600 index gained 1.2% to 474.6 points. In Paris, the CAC 40 and the SBF 120 gained 1.4% each. In Frankfurt, the DAX 40 gained 0.8% and in London, the FTSE 100 rose 0.9%. Faurecia (+5.4%) completed the acquisition of its German counterpart Hella, making the new entity the world's seventh largest automotive supplier. Technip Energies (+2.2%) is well-placed to cash in from growth in liquefied natural gas and decarbonisation, said Jefferies, starting coverage of the stock with a buy rating and a EUR18 target price. Boursorama, Société Générale's online bank (+2%) signed a memorandum of understanding with ING (+2% in Amsterdam) allowing it to offer preferential deals to take over the Dutch bank's retail customers in France. Elis (+0.5%) lowered its gross operating profit (Ebitda) margin target but raised its free cash flow forecast for 2021, after reporting last year's revenue of €3.05bn, up 8.6% on 2020 and slightly ahead of market expectations. HeidelbergCement stock rose 2.6% after it released fourth-quarter preliminary earnings late Monday which were ahead of consensus and the company's expectations, said Davy Research. The cement maker said it expects Ebitda at EUR979 million, about 5% above consensus estimates, while the expected fourth-quarter result from current operations was roughly 19% above consensus, Davy said.

United States

U.S. stocks advanced Tuesday after a late-afternoon rally helped indexes notch a three-day winning streak. All three major indexes finished the day higher, shaking off the choppiness that largely defined the session. The S&P 500 added 30.99 points, or 0.7%, to finish at 4546.54. Its three-day percentage gain now sits at 5.1%, its largest since November 2020. The Dow Jones Industrial Average advanced 273.38 points, or 0.8%, to end at 35405.24. The technology-heavy Nasdaq Composite gained 106.12 points, or 0.7%, to close at 14346.00. Both indexes also finished with their largest three-day percentage gains since November 2020. The U.S. stock market’s recent winning streak comes after a turbulent start to the year. On Monday, the S&P 500 closed out January with a 5.3% loss, its largest since March 2020. The Nasdaq fell even further, losing 9%. This week, some earnings reports have showcased strong results. Exxon Mobil gained $4.87, or 6.4%, to finish at $80.83 after it reported $23 billion in profit for 2021, its highest total since 2014. U.S.-listed shares of Switzerland’s UBS Group rose by $1.73, or 9.3%, to close at $20.40 after the bank lifted its financial targets and said it has the firepower to buy back up to $5 billion in shares this year. Megacap tech stocks, in contrast, traded mixed. Microsoft lost $2.22, or 0.7%, to finish at $308.76. Netflix jumped by $29.99, or 7%, finishing at $457.13. Tech firms suffered during January’s selloff as rising interest rates threatened to weigh on their pricey valuations, which rely on expectations for growth far in the future.


In Asia, the stock markets in Japan are showing significant gains in the middle of the week. In Hong Kong, China, Taiwan, South Korea, Singapore and Kuala Lumpur, however, the stock markets are still closed for the Lunar New Year holidays. On the Tokyo stock exchange, the Nikkei 225 index advanced by 1.2 per cent. Shares in the electronics sector, but also in airlines, are in demand. ANA Holdings improves 6 per cent after reporting an operating profit for its third fiscal quarter. In the financial sector, Nomura Holdings presented unexpectedly strong figures. The stock gained 6.8 per cent. Keyence, a manufacturer of components for automation technology, also surprised positively with its figures; the share rose by 5.7 per cent.


Ten- and 30-year US-Treasury yields posted their biggest gains in nearly a week on Tuesday, as investors assessed a closely watched gauge of labor-market tightness and continued to assess how fast and far the Federal Reserve will raise interest rates. The yield on the benchmark 10-year Treasury note rose to 1.799% from 1.780% on Monday.


Citi raises Swatch target to CHF 301 (287) - Neutral
Berenberg raises Deutsche Telekom target to EUR 27 (22) - Buy
Jefferies raises Intesa target to EUR 2.70 (2.65) - Hold

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