Is FedEx a blue-chip?
To value the stock on a fundamental basis, since FDX is a blue-chip stock with a rich history of growing dividends, here I implemented Dividend Discount Model (DDM) for fair value calculation.
FedEx offers the prospect of modest growth at a rate similar to that of the global economy, with a strong ability to return cash to investors via share repurchases and dividends. The stock offers a 1.7% yield at its current price, and the company's board just authorized a new $5 billion share buyback program.
A blue chip stock is a company that typically has a large market cap, a sterling reputation, excellent financials, and many years of success in the business world. A blue-chip index seeks to track the performance of financially stable, well-established companies that provide investors with consistent returns.
Blue chip stocks are large, diversified, recognizable businesses that are market leaders in their industries. Think Apple, American Express, UPS, and Home Depot. Companies you know well.
- Reliance Industries Ltd. Conglomerate.
- Tata Consultancy Services Ltd. Information Technology.
- Infosys Ltd. Information Technology.
- HCL Technologies Ltd. Information Technology.
- Hindustan Unilever Ltd. Fast-Moving Consumer Goods.
- ITC Ltd. ...
- Nestle India Ltd. ...
- HDFC Bank Ltd.
Looking at financial risk, UPS fares better, with its 16% debt as a percentage of equity being lower than 74% for FedEx, and its 10% cash as a percentage of assets is higher than 8% for the latter. This implies that UPS has a better debt position and more cash cushion.
FedEx officials are "confident" in their path ahead after posting third quarter earnings that beat expectations. In Thursday's earnings release, FedEx reported it made $21.7 billion in revenue for the 2024 fiscal year's third quarter that ended Feb. 29, which was a decrease from the 2023 fiscal year of $22.8 billion.
| S.No. | Company | Industry/Sector |
|---|---|---|
| 1. | Tata Consultancy Services Ltd | IT - Software |
| 2. | Infosys Ltd | IT - Software |
| 3. | Hindustan Unilever Ltd | FMCG |
| 4. | Reliance Industries Ltd | Refineries |
| Stock | 2024 return through March 31 |
|---|---|
| MicroStrategy Inc. (MSTR) | 169.9% |
| SoundHound AI Inc. (SOUN) | 177.8% |
| Vera Therapeutics Inc. (VERA) | 180.4% |
| Avidity Biosciences Inc. (RNA) | 182% |
| Stock (ticker) | Market Capitalization |
|---|---|
| AbbVie Inc. (ABBV) | $320 billion |
| Coca-Cola Co. (KO) | $256 billion |
| Nike Inc. (NKE) | $138 billion |
| Goldman Sachs Group Inc (GS) | $133 billion |
Is Amazon a blue-chip?
Amazon Joins 29 Other 'Blue Chip' Companies in the Dow Jones Industrial Average. Feb. 24, 2024, at 2:00 p.m.
What do IBM, Walmart, JPMorgan Chase, and DuPont have in common? Although they are in different sectors, they are all known as blue chip companies.
As a small example, Costco Wholesale (NASDAQ:COST) has trended higher by 226% (capital gains) in the last five years. This has led to this list of blue-chip stocks under $20.
The problem is that despite being included in blue chip ETF indexes, companies like Nvidia and Tesla aren't truly blue chip stocks, George Pearkes, an analyst at Bespoke, told CNN. They're much more volatile.
| Company Name | LTP | High |
|---|---|---|
| ICICI Bank | 1093.75 | 1097.25 |
| Tata Steel | 164.8 | 164.85 |
| Shriram Finance | 2469.3 | 2470.4 |
| Sun Pharma.Inds. | 1491.05 | 1503 |
| Stock | Sector | Trailing 12-month dividend yield* |
|---|---|---|
| Abbott Laboratories (ABT) | Health care | 1.9% |
| Stanley Black & Decker Inc. (SWK) | Industrials | 3.5% |
| Atmos Energy Corp. (ATO) | Utilities | 2.7% |
| T. Rowe Price Group Inc. (TROW) | Financials | 4.3% |
FedEx shipping breakdown
FedEx specializes in express and overnight shipping, when you need to send something fast, but it's not quite an emergency. Their standard overnight delivery services are typically marginally less expensive than UPS. FedEx is also the premier carrier for business-to-business deliveries.
For many merchants, UPS is the service of choice for shipping packages and bulky items at affordable rates. FedEx is known for its speed, which includes same-day delivery, and has a much larger air fleet than UPS. This lets it deliver envelopes and packages globally in minimal time.
Valuation metrics show that FedEx Corporation may be undervalued. Its Value Score of B indicates it would be a good pick for value investors. The financial health and growth prospects of FDX, demonstrate its potential to outperform the market. It currently has a Growth Score of C.
FedEx filed 35 WARN layoff notices from May 2001 to Apr 2024 in California, Colorado, Connecticut, Georgia, Hawaii, Iowa, Illinois, Indiana, Maryland, Missouri, New Jersey, New York, Ohio, Oregon, Tennessee, Texas and Vermont.
Why is FedEx falling?
FedEx blamed the 2% revenue decrease primarily on lower fuel surcharges at all its transportation segments along with decreased volumes in its FedEx Express and FedEx Freight segments.
FedEx charges ahead with Network 2.0, rolling out to dozens more locations in 2024. The plan to integrate its separate Express and Ground delivery networks will help close a key gap with UPS, one executive said.
| S.No. | Name | CMP Rs. |
|---|---|---|
| 1. | Motherson Wiring | 71.94 |
| 2. | Hindustan Zinc | 410.55 |
| 3. | Lloyds Metals | 737.00 |
| 4. | NMDC | 240.65 |
| Company (Ticker) | Forward P/E Ratio |
|---|---|
| Alphabet, Inc. (GOOG, GOOGL) | 22.1 |
| Citigroup, Inc. (C) | 8.4 |
| Fidelity National Information Services, Inc. (FIS) | 15.3 |
| Intuitive Surgical, Inc. (ISRG) | 60.9 |
- Vikas Ecotech Ltd.
- Comfort Intech Ltd.
- Rajnandini Metal Ltd.
- G G Engineering Ltd.
- Indian Infotech & Software Ltd.
- Genpharmasec Ltd.
- Accuracy Shipping Ltd.
- Goyal Aluminiums Ltd.
