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FedEx: Insights into Its Past Dividends

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FedEx: Fiscal 3Q18 dividend

On February 16, 2018, FedEx (FDX), the world’s premier logistics company and parcel delivery giant, declared a quarterly cash dividend of $0.50 per share on its common stock. The quarterly cash dividend is payable on April 2, 2018, to stock owners of record at the close of business on March 12, 2018.

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FDX’s dividend history and growth

FedEx has a decent track record of paying regular cash dividends to its stockholders. In the past few years, its dividend per share has grown consistently. Even during the financial crisis of 2008, it didn’t lower its annual cash dividends to equity shareholders. In the last 18 years, its dividends have multiplied by 20.

In fiscal 2018, FDX raised its cash dividends 11.1%, amounting to $2 per share from $1.80 per share in the prior fiscal year. The company’s dividend CAGR (compound annual growth rate) has been 16.3% for the last ten years.

Peer group’s dividend growth

On February 9, 2018, FedEx’s archrival United Parcel Service (UPS) raised its quarterly cash dividend by 10% compared to 1Q18. UPS will pay a regular quarterly dividend of $0.91 per share on all its outstanding Class A and Class B shares. FDX and UPS can be compared with LTL (less-than-truckload) companies due to the nature of the businesses. The leading LTL carrier, Old Dominion Freight Lines (ODFL), in its 4Q17 earnings call, declared a 30% rise in its quarterly cash dividend, taking it to $0.13 per share from $0.10 per share.

Third-party logistics services provider C.H. Robinson Worldwide (CHRW) raised its quarterly dividend to $0.46 per share in 4Q17 from $0.45 per share in 3Q17. There has been no change in the quarterly dividend paid by ArcBest (ARCB) for the last several quarters. The company has paid a quarterly dividend of $0.08 per share in each quarter for the last ten quarters.

In the next part of this series on FDX’s common dividends, we’ll look at the company’s free cash flow.

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