Pirmadienis, 22 balandžio, 2024
US Stocks

FedEx Corporation Shares

FedEx Corporation provides a wide range of transportation, e-commerce, and business services. These services are offered through independently competitive but collectively managed companies under the FedEx brand. The main activities of the company are:

  1. Federal Express Corporation, the largest express transportation company in the world;
  2. FedEx Ground Package System, Inc., the leader in small package delivery in North America;
  3. FedEx Freight, Inc. is a leader in smaller than truckload (LTL) shipping services in the USA.

The FedEx Express unit accounts for over 47% of all revenue for the company. FedEx Ground contributes 37% of the revenue. The FedEx Freight group generates 10% of the revenue, while FedEx Services contributes 0.3% of the revenue. The company transports goods worldwide using 679 planes, primarily Boeing aircraft, and approximately 79,000 vehicles.

FDX
Income by sectors

Finance

The company’s performance is influenced by global factors, and it is evident that after the pandemic, the global market is recovering, and the company’s revenues are increasing. The average annual revenue growth reaches as much as 15.28%.

FedEx Corporation’s finances are managed by taking risks. Long-term liabilities constitute 234% of Equity. And to cover Long-term debts with the profit from 2022, it would take 5.15 years. This indicator has significantly improved over the past couple of years.

The dynamics of corporate profits are unstable, but have slightly improved towards a growth trend. The average annual growth rate of EPS (Earnings Per Share) in the last 10 years was 12.17%. However, in the last 5 years, the average annual growth rate of EPS decreased to 6.94%.

The company invests in its competency framework. In 2015, the company acquired the company TNT Express. It is the largest acquisition by FedEx in history. The return on undistributed profit has increased to 15.28%. The average return on equity over ten years is 12.97%. Very good returns.

The company’s operations require constant significant capital investments. One US dollar invested in LTTA generates a profit of 0.48 USD EPS (earnings per share). And this indicator has improved over the past few years.

If the company owners would like to sell shares and invest today in U.S. 10-year Treasury bonds and get the same return as the company yielded in 2022, then they should sell the shares for $400 each.

Investment Scoreboard:

FedEx Corporation
Investment Scoreboard

FedEx Corporation shares

The company’s stocks are listed on the NYSE stock exchange. The ticker is FDX.

Over the last 10 years, the Book Value of the shares increased on average by 8.17% annually. This represents a steady growth, despite the execution of the Share Repurchase Program. It is evident that the company is a good cash generator. Through the repurchase and dividends, shareholders received a 67% return on Equity for the year 2022.

The average annual dividend growth reaches as much as 27.41%. At the time of writing, the dividend yield stands at 1.85%. However, for those who bought shares right after the idea announcement, the dividend yield surged to 4.50%.

The GRAPES method calculates the perspective of the price at 433 USD. Similarly, as with risk-free bonds, investors in the market already see a good company: PEG is 2.55.

In our method, the assessed price perspective is less optimistic, but still in the same range:

FedEx Corporation
Perspective of price

Since the idea was announced in July 2013, investors have already received approximately a pre-tax return of 167.15% or an average annual return of 10.17%. We recommend continuing to hold and add to the position.


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