FedEx (FDX) Rewards Shareholders With Share Repurchase

In a shareholder-friendly move, FedEx Corporation FDX inked an accelerated share repurchase (ASR) deal with Mizuho Markets Americas LLC to repurchase $1.0 billion of FedEx’s common stock. The transaction is part of the company’s previously announced share repurchase program.

Per the ASR agreement, FedEx will pay $1.0 billion to Mizuho and receive an initial share delivery of almost 3.2 million shares on Dec 28, 2023. The remaining shares, if any, will be delivered by Feb 29, 2024. The number of shares purchased by FedEx will depend on an average of the volume-weighted average prices of FedEx’s common stock during the tenure of the ASR agreement, less a discount.

FedEx has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. During the first half of fiscal 2024, FedEx paid dividends worth $635 million and repurchased shares worth $1000 million. During fiscal 2023, FedEx paid dividends worth $1,177 million and repurchased shares worth $1,500 million. During fiscal 2022, FedEx paid dividends worth $793 million (higher than the $686 million dividend payout in fiscal 2021).

FDX management’s decision to initiate its share buyback program reflects the company’s commitment to boosting shareholder value apart from underlining confidence in its business. We believe such shareholder-friendly initiatives should boost investor confidence and positively impact thisZacks Rank #3 (Hold) stock bottom line.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FedEx is not the only player from the Zacks Transportation sector that has rewarded its shareholders with dividend payouts or share buyback programs. To name a few, on Dec 6, 2023, Trinity Industries, Inc.’s (TRN) board of directors increased its quarterly cash dividend by almost 8%, from 26 cents per share to 28 cents. The raised dividend, reflecting Trinity’s 239th consecutively paid dividend, will be paid out on Jan 31, 2024, to all its shareholders of record as of Jan 12, 2024.

On Dec 5, Landstar System, Inc.’s LSTR board of directors raised the number of shares of its common stock, which the company is authorized to purchase, to 3,000,000. The latest uptick allows the company to purchase 319,332 new shares, apart from the existing authorization to purchase 2,680,668 shares.

Additionally, LSTR’s board has declared a special one-time cash dividend of $2.00 per share. This special dividend will be paid on Jan 19, 2024, to all its shareholders of record as of business on Jan 3, 2024.

On Nov 3, 2023, Air Lease Corporation’s AL board of directors increased its quarterly cash dividend by 5%, from 20 cents per share to 21 cents. The raised quarterly dividend of 21 cents per share will be paid on Jan 10, 2024, to shareholders of record as of Dec 15, 2023.

We believe such shareholder-friendly initiatives boost investor confidence and positively impact the company’s bottom line.

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FedEx Corporation (FDX) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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