Here's Why You Should Add FedEx (FDX) to Your Portfolio Now
FedEx Corporation FDX is gaining significantly from the coronavirus-driven surge in e-commerce demand. Owing to residential delivery volume growth, the company’s Ground segment is witnessing a boom. Notably, revenues from the Ground unit jumped 37% year over year in the first nine months of fiscal 2021. With strong e-commerce demand here to stay, the segment is expected to continue its robust performance.
The company’s December 2020 acquisition of ShopRunner, a Chicago, IL-based e-commerce platform connecting online shoppers with their favorite merchants and brands, further bolsters its e-commerce offerings. ShopRunner operates as a subsidiary of FedEx Services. Additionally, the company’s acquisition of Cargex has strengthened its Latin American footprint.
FedEx’s measures to reward its shareholders are encouraging. Notably, its dividends have increased at a five-year CAGR of 26%.
FedEx Corporation Price and Consensus
FedEx Corporation price-consensus-chart | FedEx Corporation Quote
Moreover, the company’s solid cash position underlines its healthy financial prospects. FedEx exited the third quarter of fiscal 2021 with cash and cash equivalents of $8,856 million, way above its debt load (current portion) of $646 million. This indicates that the company has sufficient cash to meet its current debt obligations. Additionally, the company's current ratio was pegged at 1.60 at the end of the same period, higher than the industry's average of 1.29. This liquidity ratio measures a company's ability to pay short-term obligations.
The optimism surrounding the stock is evident from the Zacks Consensus Estimate for fiscal 2021 earnings being revised upward by 4.4% in the past 90 days. The same for fiscal 2022 earnings has been revised northward by 8.9%.
In light of the above-mentioned positives, we believe the time is rife for investors to add the FedEx stock to their portfolios, as is suggested by its Zacks Rank #2 (Buy).
Other Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider C.H. Robinson Worldwide CHRW, Expeditors International of Washington EXPD and Covenant Logistics Group CVLG. While Expeditors and Covenant Logistics sport a Zacks Rank #1 (Strong Buy), C.H. Robinson carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of C.H. Robinson, Expeditors and Covenant Logistics have rallied more than 20%, 59% and 66% in a year’s time, respectively.
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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
Covenant Logistics Group, Inc. (CVLG) : Free Stock Analysis Report
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