Expeditors International of Washington (NASDAQ: EXPD) and FedEx (NYSE:FDX) are both mid-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.
This table compares Expeditors International of Washington and FedEx’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Expeditors International of Washington||6.54%||22.03%||14.58%|
Volatility & Risk
Expeditors International of Washington has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, FedEx has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.
Insider & Institutional Ownership
94.1% of Expeditors International of Washington shares are held by institutional investors. Comparatively, 76.4% of FedEx shares are held by institutional investors. 0.8% of Expeditors International of Washington shares are held by insiders. Comparatively, 8.7% of FedEx shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent ratings and price targets for Expeditors International of Washington and FedEx, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Expeditors International of Washington||1||6||1||0||2.00|
Expeditors International of Washington presently has a consensus target price of $55.50, indicating a potential upside of 1.95%. FedEx has a consensus target price of $221.88, indicating a potential upside of 8.30%. Given FedEx’s stronger consensus rating and higher probable upside, analysts plainly believe FedEx is more favorable than Expeditors International of Washington.
Expeditors International of Washington pays an annual dividend of $0.84 per share and has a dividend yield of 1.5%. FedEx pays an annual dividend of $2.00 per share and has a dividend yield of 1.0%. Expeditors International of Washington pays out 36.2% of its earnings in the form of a dividend. FedEx pays out 18.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Expeditors International of Washington has increased its dividend for 22 consecutive years and FedEx has increased its dividend for 7 consecutive years. Expeditors International of Washington is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Expeditors International of Washington and FedEx’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Expeditors International of Washington||$6.42 billion||1.53||$701.62 million||$2.32||23.47|
|FedEx||$60.32 billion||0.91||$8.28 billion||$11.06||18.52|
FedEx has higher revenue and earnings than Expeditors International of Washington. FedEx is trading at a lower price-to-earnings ratio than Expeditors International of Washington, indicating that it is currently the more affordable of the two stocks.
FedEx beats Expeditors International of Washington on 10 of the 17 factors compared between the two stocks.
About Expeditors International of Washington
Expeditors International of Washington, Inc. is a logistics company. The Company is a third-party logistics provider, and purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers. The Company provides a range of customer solutions, such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance and customized logistics solutions. In addition, the Company’s Project Cargo unit handles special project shipments that move through a single method or combination of air, ocean, and/or ground transportation. The Company’s services include airfreight services, ocean freight and ocean services, and customs brokerage and other services. The Company operates along five geographic areas: the Americas; North Asia; South Asia; Europe, and the Middle East, Africa and India.
FedEx Corporation (FedEx) provides a portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. The Company’s segments include FedEx Express, TNT Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers a range of the United States domestic and international shipping services for delivery of packages and freight. TNT Express segment collects, transports and delivers documents, parcels and freight on a day-definite or time-definite basis. The FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services. The FedEx Freight segment offers less-than-truckload (LTL) freight services. The FedEx Services segment provides its other companies with sales, marketing, information technology, communications, customer service and other back-office support.
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