September 15, 2025 a 07:47 am
FDX: Dividend Analysis - FedEx Corporation
FedEx Corporation's dividend profile presents a steady long-term growth potential. With a current dividend yield of 2.52% and consistency in payments over the past 24 years, the company offers an attractive shareholder return. The robust free cash flow supports continued payments, although the recent dividend history suggests some caution. A moderate payout ratio indicates a sustainable ability to maintain dividends.
📊 Overview
FedEx Corporation is a leading player in the logistics sector with demonstrated financial strength and, notably, a robust track record of dividend payments. The dividend yield of 2.52% aligns with sector norms, providing regular income to investors. The company's last dividend cut was absent, reflecting stable policy.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Logistics | 2.52% | 5.51 USD | 24 years | None |
🗣️ Dividend History
The history of dividend payments is crucial for assessing a company's commitment to returning capital to shareholders. FedEx has consistently increased dividends, evidenced by the growth of its payouts over the past five years. This trend is essential for income investors seeking reliability and growth.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 4.28 |
| 2024 | 5.40 |
| 2023 | 4.93 |
| 2022 | 4.20 |
| 2021 | 2.90 |
📈 Dividend Growth
Dividend growth is a key indicator of an organization's ability to enhance shareholder value. FedEx's growth rates over the past three and five years highlight modest yet stable increases, enhancing its appeal to growth-oriented investors.
| Time | Growth |
|---|---|
| 3 years | 23.03% |
| 5 years | 15.74% |
The average dividend growth is 15.74% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios, based on EPS and free cash flow, provide insight into the dividend sustainability. FedEx maintains a prudent EPS payout ratio of 32.05% and a FCF payout ratio of 43.61%, indicating its dividends are well-covered by earnings and cash flow.
| Key figure | Ratio |
|---|---|
| EPS-based | 32.05% |
| Free cash flow-based | 43.61% |
The payout ratios suggest that FedEx is maintaining a balanced approach, ensuring that dividends remain sustainable without overextending its earnings capacity.
✅ Cashflow & Capital Efficiency
The analysis of cash flows and capital efficiency reflects FedEx's capacity to manage its operational funds and return on investments. Strong free cash flow supports dividend payments. Evaluating metrics like CAPEX to operating cash flow and compensation to revenue ensures a comprehensive view of fiscal responsibility.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 4.77% | 4.98% | 5.62% |
| Earnings Yield | 7.17% | 6.88% | 7.72% |
| CAPEX to Operating Cash Flow | 70.04% | 62.27% | 57.63% |
| Stock-based Compensation to Revenue | 0.20% | 0.19% | 0.18% |
| Free Cash Flow / Operating Cash Flow Ratio | 29.96% | 37.73% | 42.37% |
Strong capital efficiency metrics support FedEx's ability to sustainably reinvest in growth while rewarding shareholders.
📉 Balance Sheet & Leverage Analysis
A healthy balance sheet is crucial for company stability. Metrics such as debt-to-equity and current ratios provide insights into FedEx's financial structure and risk management capabilities. A balanced leverage ratio indicates efficient debt management.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 1.47 | 1.37 | 1.33 |
| Debt-to-Assets | 0.44 | 0.43 | 0.43 |
| Debt-to-Capital | 0.60 | 0.58 | 0.57 |
| Net Debt to EBITDA | 3.08 | 2.87 | 3.15 |
| Current Ratio | 1.37 | 1.36 | 1.19 |
| Quick Ratio | 1.32 | 1.32 | 1.15 |
| Financial Leverage | 3.34 | 3.15 | 3.12 |
FedEx demonstrates a strong ability to manage its debt, supported by a steady current ratio, ensuring liquidity to handle obligations.
✅ Fundamental Strength & Profitability
Profitability metrics such as ROE and profit margins evaluate management efficiency in generating profits from shareholders' equity and assets. Strong ratios highlight FedEx's capacity for sustained earnings and investment returns.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | 15.23% | 15.70% | 14.58% |
| Return on Assets | 4.56% | 4.98% | 4.67% |
| Net Margin | 4.41% | 4.94% | 4.65% |
| EBIT Margin | 6.72% | 7.50% | 6.67% |
| EBITDA Margin | 11.35% | 12.39% | 11.52% |
| Gross Margin | 21.26% | 21.61% | 21.60% |
FedEx's profitability metrics underscore its effective cost management and ability to enhance margins, fostering shareholder value.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33/40
🗣️ Rating
FedEx Corporation displays a strong dividend profile supported by its stable growth and efficient financial management. With a solid dividend yield, consistent payout history, and robust balance sheet, it presents an attractive investment for dividend-seeking investors, warranting a positive recommendation.