Posted on 10/08/2014 3:07:59 PM PDT by Kaslin
FedEx Corporation (FDX) is a company name most of us are familiar with as a provider of shipping, e-commerce, and business services. The company was founded back in 1971 and is based in Memphis, Tennessee.
FedEx’s famed CEO and Founder Fred Smith was the son of a wealthy entrepreneur who died when Fred was only four years old. Smith was raised by his mother and uncles, becoming an amateur pilot as a teen, and graduating from Yale University with a degree in Economics. It was while he was at Yale he wrote a paper outlining the idea for an overnight delivery service in the computer information age. This paper only earned him a grade of “C”, but it became the blueprint for the company called Federal Express. After graduating from Yale he served in the Marine Corps and received the Silver Star, the Bronze Star, and two Purple Hearts. He used his $4 million inheritance to start the company Federal Express.
FedEx continues to be a major competitive force in the industry, benefiting from the rise of e-commerce and the increasing demand for expedited shipping solutions. The company just reported a blow-out quarter on September 17, beating analyst estimates by $0.15 and also exceeding revenue estimates. The upside to estimates was driven by strong volume growth in its FedEx Ground segment which delivers online purchases, but the company executed well across all three segments: business, ground, and freight. FedEx’s shipping rates will be increasing effective January 5, 2015 by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.
So after a few rocky quarters, FedEx’s business appears to be back on track and poised for the holiday season. When I look for good companies using my Best Stocks Now analysis, I am searching for companies that are executing well and outperforming their peers and the overall market. But I am also looking for companies trading at a reasonable valuation. FedEx meets all of those criteria. And if you look at its chart, you can see that FedEx stock is delivering.
FedEx’s board just authorized a new share repurchase program for 15 million shares, an amount equivalent to more than 5% of its diluted shares outstanding as of mid-September. The company also recently raised its dividend by 33%, marking the fifth straight year it has increased its dividend payout to shareholders.
Let’s take a closer look at FedEx.
Data from Best Stocks Now app
FedEx is a $45.7 billion company in the transportation sector. It is a Large Cap stock which have been doing well in the current risk-averse market environment. Its risk profile is Conservative.
Data from Best Stocks Now app
FedEx’s valuation is also quite reasonable, trading at a forward P/E of around 15. Its estimated 5 year annual growth rate is a robust 15+%. Not bad for a mature company. It also delivers a dividend yield of .50%, which as previously mentioned continues to increase. FedEx receives a Value Grade of B+.
Data from Best Stocks Now app
FedEx stock is up more than 12% this year, vs. the 7% return for the S&P 500. Over the last 12 months, shares have risen more than 42%. And on a 3, 5, and 10 year annualized basis, FedEx has been a consistent outperformer. FedEx receives a Momentum Grade of A- and a Performance Grade of B. It is a solid performer among large cap names.
Data from Best Stocks Now app
FedEx ranks #59 out of the 3800+ stocks I follow in the Best Stocks Now universe and receives an overall Stock Grade of A-.
I own FedEx stock in my Growth and Income accounts. It is company that is executing well and benefiting from the trend toward online shopping and e-commerce. It also stands to gain from lower energy costs and higher shipping rates. It has captured share from its rival UPS, thanks to its superior service and infrastructure. Along with UPS, FedEx also just recently won approval to expand its business in China. So despite the fact the stock is trading at record high levels, its valuation is being sustained by a strong competitive position and robust earnings growth story.
The charges are bogus of course. Eric Holder is just doing an extortion scheme on them like he already has several corporations.
Low wage for extreme physical labor.
I ordered a custom computer a few years back and it was delivered by FedEx. The box containing the computer looked like it had been kicked out of the plane and then dropped out of the truck while still moving. The computer required quite a bit of work to get it going.
I’ve seen a few boxes with torn corners, At the rate at which the workers are to sort the packages, damage does get through. It is a very intense labor job. No AC, no heat, starting wage is about 8.79.
Don’t know about their politics...most companies give to both parties. I ordered a on demand water heater, it arrived damaged, Fed Ex was very good about paying for unit...took about 10 days but I was pleased with their settlement!!!
Fred nearly always supports the R, but also whoever is going to help Fred in the long run.
I lived latterly next door to FedEx for 26 years. Don’t miss those 2AM take offs.
They take shipments for my area, but they often don’t deliver to it. If urged a second or third time to deliver, they break things. And the drivers are disrespectful slobs.
They are running an employment ad on the radio. It says that they are seeking a diverse work force and are committed to affirmative action hiring.
The donation didn’t keep the Feds from trying to shake down the non-union delivery company after helping the union one skate on the same charges.
In 2005, FedEx was among 53 entities that contributed the maximum of $250,000 to sponsor the second inauguration of President George W. Bush
The company has donated over $21 million since 1990, 45% of which went to Democrats and 55% to Republicans.
I do not think you can find a company in FedEx position who does not donate to whomever is in power.
Do you wear brown to work, by any chance? :)
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