1 Reason I'm Keeping My Eye on UPS Stock Right Now

UPS (NYSE: UPS) is one of the most fascinating stocks on the market. It offers investors a lot of long-term potential, and management is following the right operational approach. However, there are question marks around its capital allocation policy, and concerns that management may be unnecessarily constraining its ability to generate value for its investors. It's a battleground among income-seeking and growth-seeking investors, and that makes for a fascinating following.Addressing the elephant in the room, passive income investors will delight in CEO Carol Tome's assertion on the recent earnings call that "The UPS dividend is backed by solid free cash flow and a strong investment-grade balance sheet. We know how important the dividend is to our investors, and you have our commitment to a stable and growing dividend."UPS' dividend is usually backed by solid free cash flow (FCF), but that's not the case right now. The dividend will use up $5.5 billion in cash this year, and as the chart demonstrates, UPS' rolling-12-month FCF is significantly below that right now.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool