FedEx Raises Quarterly Dividend by 53%: When Do Companies Pay Dividends?

FedEx Pre-Earnings: What Should Investors Expect in Q4?

FedEx is among the largest logistics players in the world and the company is expected to report earnings for fiscal Q4 of 2022 this week.

Logistics heavyweight FedEx (NYSE: FDX) is among the most popular stocks in the S&P 500 index. Valued at a market cap of $60 billion, FedEx has returned 176% to investors in the last ten years after adjusting for dividends. Comparatively, the S&P 500 index has surged 226.6% since June 2012.

Let’s see if FDX stock can gain momentum and outpace the broader markets following the company’s fiscal Q4 of 2022 results (ended in May).

When is FedEx’s earnings date?

FedEx is scheduled to report its earnings for fiscal Q4 of 2022 on Thursday, June 23rd at 5 PM Eastern Time.

How can I listen to FedEx’s earnings call?

To listen to the call and access the earnings transcript, the shareholder’s letter, and the company’s financial statements for the quarter, all you need to do is go to FedEx’s investor relations page.

What to expect from FedEx’s Q4 earnings?

FedEx offers transportation, e-commerce, and business services in the U.S. and several international markets. At the end of fiscal 2021, FedEx had a network of 400 service centers and 29,000 vehicles.

The company has increased sales from $69.69 billion in fiscal 2019 to $83.95 billion in fiscal 2021. In the last four quarters, its revenue stood at $91.68 billion.

Analysts tracking FedEx expect it to report revenue of $24.47 billion and adjusted earnings of $6.88 per share in the May quarter. In the year-ago period, FedEx reported revenue of $22.57 billion and adjusted earnings of $5.01 per share. While sales are forecast to rise by 8.4% year-over-year, adjusted earnings might increase by 37.3% in Q4.

FedEx derives a significant portion of its sales from small and medium enterprises operating in the e-commerce segment. It has successfully expanded its capacity to service e-commerce businesses, allowing the company to diversify its revenue base and take advantage of multiple secular tailwinds.

Data from Statista suggests the e-commerce market is set to increase at an annual rate of 10% in the next four years. So, FedEx is well-poised to keep growing its top line in 2022 and beyond, which should also translate to expanding its profit margins. In fact, analysts expect FedEx to boost earnings at an annual rate of 12.36% in the next five years.

FedEx will also benefit from the acquisition of TNT, a Europe-based company. The acquisition should lower the company’s cost structure as it will be able to streamline flight routes efficiently.

FedEx stock is up 13% since it announced a 53% increase in quarterly dividends on June 13. The company will now pay a quarterly dividend of $1.15 per share, compared to its previous payout of $0.75 per share. Before this announcement, FedEx had a payout ratio of just 16%, which indicates that these payouts are likely sustainable. Its current dividend payments suggest FDX stock offers investors a yield of 2%.

FDX stock is valued at 0.64x forward sales and 11.2x forward earnings, which is quite reasonable. Analysts have a 12-month average price target of $288 for FDX, indicating an upside potential of 26% from current prices.

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