FedEx Bumps Up Dividend By 15.4%; Street Says Buy

FedEx (FDX) declared a quarterly dividend of $0.75 per share on the company’s common stock, up 15.4% from the previous $0.65 per share dividend. The company provides customers and businesses with a broad portfolio of transportation, e-commerce, and business services.

The dividend is payable on July 12 to shareholders of record on June 28. FedEx’s annual dividend of $3 per share now reflects a dividend yield of 1.02%.

FedEx CEO Michael C. Lenz said, “Increasing our dividend reinforces our commitment to drive value for shareowners.”

He further added, “Our balance sheet and cash flow allow us to strategically invest in long-term, profitable growth while also rewarding our shareowners by raising our dividend.” (See FedEx stock analysis on TipRanks)

On June 4, Raymond James analyst Patrick Brown reiterated a Buy rating on the stock and increased his price target to $330 from $310. This implies 12.6% upside potential to current levels.

Brown said, “We continue to believe investments across the portfolio position FDX to reap future operational cost benefits (Ground/ Express “Last Mile Optimization”), synergies (TNT), and growth (Ground seven day rollout + last mile delivery at Freight).”

He further added, “Moreover, while we are cognizant of lingering macro risk, we see mounting tailwinds in the residential parcel delivery complex anchored by a pronounced e-commerce acceleration and seemingly positively evolving pricing landscape.”

Consensus among analysts is a Strong Buy based on 15 Buys and 3 Holds. The FedEx average analyst price target of $341.67 implies 16.6% upside potential from the current levels. Shares have gained 119.2% over the past year.

FedEx scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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