What is forward dividend yield?
A dividend-paying company’s forward dividend yield is figured by expressing the estimated dividend as a percentage of the present stock price. The forward dividend yield takes into account the latest quarterly dividend payment and is annualized over the next year. When there’s an element of certainty in estimating dividend growth, it’s better to use the forward dividend yield rather than the trailing dividend yield.
FedEx’s forward dividend yield
In comparing dividend yields, FedEx can be compared with its archrival United Parcel Service (UPS) because of their comparable business models. FedEx has a far lower forward dividend yield of 0.82% than UPS’s at 3.2%. In our discussion of forward dividend yield, we have included publicly traded, dividend-paying major LTL (less-than-truckload) carriers. In addition, we have covered the dividend yields of major clearing and forwarding and freight brokerage logistics companies in the United States.
In the above chart, you can see that UPS has the highest forward dividend yield of 3.2% in the peer group. In the last 12 quarters, its forward dividend yield has risen steadily. UPS’s dividend yield is followed by major third-party logistics carrier C.H. Robinson Worldwide (CHRW). CHRW has a forward dividend yield of 2.2%.
Expeditors International of Washington (EXPD) is another major third-party logistics services provider with a metric of 1.4%. Forward Air (FWRD), a key provider of intermodal, LTL, and truckload services, has a yield of 1.1%. ArcBest (ARCB) has a forward dividend yield of 1%. Old Dominion Freight Lines (ODFL) has the lowest yield of 0.4% among these LTL carriers.
In the next and final part of this series, we’ll take a look at FDX’s stock performance in 2018.