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The global delivery services industry has emerged as one of the most essential sectors connecting consumers and businesses both big and small. The FedEx Company, founded in 1971, has gradually become one of the biggest players in the market today.
FedEx operates through a network of subsidiaries, providing delivery, freight, and e-commerce services to corporate and individual customers.
FedEx’s core business is package delivery and the company offers its services in more than 200 countries worldwide.
The global delivery industry is growing, and FedEx has proven to be one of the top players to invest in and gain exposure to this growth.
FedEx reached its all-time high during the Covid-19 pandemic when hundreds of millions of people around the world were subject to lockdown measures and resorted to online shopping to fulfill their needs. After the market correction that happened in 2022, coupled with global supply chain issues and inflation, FedEx stock fell to pre-pandemic levels but has since regained upwards momentum.
Investors may be wondering how long FedEx’s current bull run will continue and whether it is the right time to invest in FedEx stock. If you are such an investor - this investfox guide to FedEx stock is for you.
FedEx stock has had a wild ride during the Covid-19 pandemic. As lockdown measures were enforced around the globe, consumers drastically increased their online spending, which boosted demand for FedEx’s services. This sudden increase in demand boosted the stock from as low as $90 during the initial stages of the pandemic, to as high as $342 at its peak in 2021.
However, as lockdown measures were lifted and consumer spending normalized, the company was faced with a drastically different reality - high inflation and ongoing supply chain constraints, which greatly affected the company’s bottom line and returned the stock to a more modest valuation.
The stock dropped from its $300+ highs to as low as $150 per share, losing half of its market value in the process. However, FedEx stock has since marked a turnaround, reaching over $200 by the start of 2023.
In terms of financial performance, FedEx’s latest quarterly earnings report highlights the operational difficulties faced by the company throughout 2022:
A negative highlight of the earnings report was the razor-thin profit margin. FedEx already operates in an industry with notoriously low profit margins, and an over 25% reduction could hurt the company’s ability to increase its annual dividend, which currently stands at $1.26 per share, which amounts to an annual yield of 2.25% - an attractive option for income-oriented investors.
Before investing in FedEx, it is crucial to consider the advantages and disadvantages associated with doing so, as well as the potential challenges and opportunities that lie ahead for the company.
FedEx trades its stock on the New York Stock Exchange after going public in 1978 under the FDX ticker symbol. The stock is a component of the S&P 500, as well as the Dow Jones Transportation Average.
FedEx has paid dividends on its stock since 2002 and currently holds an annual dividend yield of 2.25%, which is an attractive yield for most income-oriented investors.
FedEx has seen massive growth throughout the Covid-19 pandemic, but has since lost most of the surplus market value, as the company grapples with supply chain issues and inflation, the stock has analysts divided.