Revenue and Earnings Ratio
Strengths:
Revenue Growth: In 2008, FedEx reported revenue of $38 billion; in 2012 the company reported revenue of $42.7 billion, representing a year over year annual growth rate of 2.96%, and while this may not seem like an explosive number, the caliber of growth is solid and expected to accelerate into the future, with 2015 revenues reaching nearly $49 billion.
Established Distribution System: The company possesses a massive fleet of airplanes, trucks, locations, and employees, and is distinctly established and has the capability of transporting thousands of packages every day.
Dividend: The company currently pays out a quarterly dividend of $0.14, which annualized puts the dividend as yielding 0.62%.
Reasonable Valuation: The company carries a price to earnings ratio of 14.02, which by nearly all standards is a relatively reasonable valuation.
Institutional Vote of Confidence: 78% of shares outstanding are held by institutional investors, displaying the huge amount of confidence long-term and big-money investors have in the company and its future.
Money on the Balance Sheets: The company currently has $1.176 billion in cash or cash equivalents on its balance sheet, a large cushion for times of economic downfall.
Weaknesses:
Relative Small Size: Compared to UPS, FedEx is considered a rather small company, and in an industry in which consumers have to put their trust in a company to get their product to a place on time, consumers often turn to the largest company with the best reputation.
Margins: FedEx’s net profit margin is only 4.76%, leaving little room for the company to swallow rising input costs.
Declining Cash Flow per Share: In 2012, the company possessed $17.00 of cash flow per share, however in 2013 the average analysts estimates show the cash flow per share only reaching $14.60, representing a 14.12% year over year decline.
Opportunities:
Acquisitions: During the 2012 year FedEx has acquired Rapidao Cometa, Opek Sp., and TATEX; and further
Revenue Growth: In 2008, FedEx reported revenue of $38 billion; in 2012 the company reported revenue of $42.7 billion, representing a year over year annual growth rate of 2.96%, and while this may not seem like an explosive number, the caliber of growth is solid and expected to accelerate into the future, with 2015 revenues reaching nearly $49 billion.
Established Distribution System: The company possesses a massive fleet of airplanes, trucks, locations, and employees, and is distinctly established and has the capability of transporting thousands of packages every day.
Dividend: The company currently pays out a quarterly dividend of $0.14, which annualized puts the dividend as yielding 0.62%.
Reasonable Valuation: The company carries a price to earnings ratio of 14.02, which by nearly all standards is a relatively reasonable valuation.
Institutional Vote of Confidence: 78% of shares outstanding are held by institutional investors, displaying the huge amount of confidence long-term and big-money investors have in the company and its future.
Money on the Balance Sheets: The company currently has $1.176 billion in cash or cash equivalents on its balance sheet, a large cushion for times of economic downfall.
Weaknesses:
Relative Small Size: Compared to UPS, FedEx is considered a rather small company, and in an industry in which consumers have to put their trust in a company to get their product to a place on time, consumers often turn to the largest company with the best reputation.
Margins: FedEx’s net profit margin is only 4.76%, leaving little room for the company to swallow rising input costs.
Declining Cash Flow per Share: In 2012, the company possessed $17.00 of cash flow per share, however in 2013 the average analysts estimates show the cash flow per share only reaching $14.60, representing a 14.12% year over year decline.
Opportunities:
Acquisitions: During the 2012 year FedEx has acquired Rapidao Cometa, Opek Sp., and TATEX; and further