Here's Why Investors Should Hold FedEx (FDX) in Portfolios Now
FedEx Corporation FDX is benefiting from investor-friendly steps and solid liquidity.
Factors Favoring FDX
FedEx's liquidity position is solid. Notably, the company's current ratio, a measure of liquidity, was pegged at 1.37 at fourth-quarter fiscal 2023 end. A current ratio of more than 1 indicates that the company's assets will be able to cover its debts that are due at the year end.
We are pleased with FDX’s efforts to reward shareholders even in these difficult times. In April 2023, FedEx raised its quarterly dividend by 10% to $1.26 per share (or $5.04 annually). It is also active on the buyback front. During fiscal 2022, FedEx repurchased shares worth $2.2 billion.
Key Risks
In fiscal 2023, capital expenditures came in at $6.1 billion. Management anticipates capital spending of approximately $5.7 billion in fiscal 2024. The lower outlook is mainly due to demand weakness. This might hit its long-term growth prospects.
Zacks Rank
FDX currently carries Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks for investors interested in the Zacks Transportation sector are GATX Corporation GATX and Kirby Corporation KEX.
GATX, which presently carries a Zacks Rank #2 (Buy), is aided by gradual improvement in the North American railcar leasing market. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For third-quarter and full-year 2023, GATX’s earnings are estimated to register 36.6% and 14.3% climb, respectively, on a year-over-year basis.
Kirby currently carries a Zacks Rank #2. Strong segmental performances are boosting Kirby’s top line.
For third-quarter and full-year 2023, KEX’s earnings are suggested to record 58.5% and 76.2% improvement, respectively, on a year-over-year basis.
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FedEx Corporation (FDX) : Free Stock Analysis Report
Kirby Corporation (KEX) : Free Stock Analysis Report
GATX Corporation (GATX) : Free Stock Analysis Report
