Here's Why Investors Should Retain Expeditors (EXPD) Stock Now
Expeditors International of Washington, Inc. EXPD is benefiting from a healthy current ratio and shareholder-friendly steps.
Factors Favoring EXPD
We are impressed by Expeditors' efforts to reward its shareholders. In May 2022, the company announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34 per share). EXPD hiked its dividend by a further 3% this year, raising its semi-annual cash dividend to 69 cents per share. The company is also active on the buyback front. In the coronavirus-ravaged 2020, the company repurchased 4.6 million shares, with an average price of $72.26 per share. During 2021, the company repurchased 4.4 million shares at an average price of $117.54 per share. In 2022, EXPD repurchased 14.5 million shares of common stock at an average price of $108.88 per share. In the first nine months of 2023, EXPD repurchased 10.5 million shares of common stock at an average price of $113.97 per share.
Expeditors' healthy current ratio (a measure of liquidity) is encouraging. The measure stood at 2.11 at the end of the third quarter of 2023. A current ratio in excess of 1 indicates that a company has enough short-term assets on hand to cover all short-term liabilities.
Key Risks
High capital expenditures are also likely to hurt the bottom line. Capital expenditures for 2022 were $86.8 million, much higher than the $36.2 million reported in 2021. Such high capex in such a weak demand environment is not a welcome development.
Zacks Rank
EXPD currently carries Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Air Canada ACDVF and SkyWest SKYW.
Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a new year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.
The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand.
SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet-modernization efforts are commendable. Initiatives to reward its shareholders bode well. The Zacks Consensus Estimate for current-quarter earnings has surged 83.3% in the past 60 days.
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Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
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Air Canada (ACDVF) : Free Stock Analysis Report
