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Here's Why Expeditors (EXPD) Deserves a Place in Your Portfolio
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Expeditors International of Washington’s (EXPD - Free Report) efforts to reward its shareholders through dividends and buybacks bode well. Investors always prefer an income-generating stock. Hence, a dividend-paying one is much coveted.
Apart from providing a solid income stream dividend-paying stocks have fewer chances of experiencing wild price swings. Dividend stocks, like EXPD, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.
Given this backdrop, lets delve deeper to unearth the factors that make Expeditors an attractive pick currently.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter earnings has been revised 15.3% upward over the past 60 days. For 2022, the consensus mark for earnings has moved 3.4% north in the same time frame. The favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of Expeditors have performed well on the bourse, gaining 4.3% over the past six months against the 13% depreciation of its industry.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Expeditors currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, EXPD seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank: The industry to which Expeditors belongs currently has a Zacks Industry Rank of 80 (of 250 plus groups). Such a solid rank places the industry in the top 32% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Other Tailwinds: As already mentioned, Expeditors’ investor- friendly attitude bodes well. In May 2022, EXPD had announced an 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34 per share). In the first nine months of 2022, EXPD repurchased 9.5 million shares of common stock at $106.84 per share.
Despite the current uncertain scenario due to supply-chain disruptions and weakening demand, revenues from airfreight services increased 4.6% in the first nine months of 2022. Per Bradley S. Powell, EXPD's Senior Vice President and Chief Financial Officer, "As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand."
We are also optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) :TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 180.2% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 57.7% north.
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Here's Why Expeditors (EXPD) Deserves a Place in Your Portfolio
Expeditors International of Washington’s (EXPD - Free Report) efforts to reward its shareholders through dividends and buybacks bode well. Investors always prefer an income-generating stock. Hence, a dividend-paying one is much coveted.
Apart from providing a solid income stream dividend-paying stocks have fewer chances of experiencing wild price swings. Dividend stocks, like EXPD, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.
Given this backdrop, lets delve deeper to unearth the factors that make Expeditors an attractive pick currently.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter earnings has been revised 15.3% upward over the past 60 days. For 2022, the consensus mark for earnings has moved 3.4% north in the same time frame. The favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of Expeditors have performed well on the bourse, gaining 4.3% over the past six months against the 13% depreciation of its industry.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Expeditors currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, EXPD seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank: The industry to which Expeditors belongs currently has a Zacks Industry Rank of 80 (of 250 plus groups). Such a solid rank places the industry in the top 32% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Other Tailwinds: As already mentioned, Expeditors’ investor- friendly attitude bodes well. In May 2022, EXPD had announced an 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34 per share). In the first nine months of 2022, EXPD repurchased 9.5 million shares of common stock at $106.84 per share.
Despite the current uncertain scenario due to supply-chain disruptions and weakening demand, revenues from airfreight services increased 4.6% in the first nine months of 2022. Per Bradley S. Powell, EXPD's Senior Vice President and Chief Financial Officer, "As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand."
We are also optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 180.2% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 57.7% north.