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Expeditors International of Washington, Inc. (EXPD) - free report >>
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Expeditors International of Washington, Inc. (EXPD) - free report >>
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Uptick in Revenues Drive Expeditors (EXPD), High Costs Ail
We recently issued an updated report on Expeditors International of Washington, Inc. (EXPD - Free Report) .
We are impressed by Expeditors' efforts to reward shareholders through dividend payouts and buybacks. Even in the coronavirus-ravaged 2020, the company rewarded its shareholders. In 2020, the company repurchased 4.6 million shares on average price of $72.26 per share. In May 2020, the company announced 4% hike in semi-annual cash dividend to 52 cents per share (annualized $1.04 per share).
Moreover, the company is benefiting from uptick in airfreight revenues. Revenues from its airfreight services segment increased 63.3% year over year in 2020. Due to the coronavirus-induced imbalance between scheduled capacity and demand, the company is compelled to use charters to meet customer needs.
Meanwhile, Expeditors hurt by increase in operating expenses. Notably, operating expenses escalated 23.9% year over year in 2020. The uptick in costs is primarily due to the 71.6% increase in operating expenses pertaining to airfreight services with average buy rates increasing 81%. This sharp increase in operating expenses is limiting bottom-line growth.
Zacks Rank & Stocks to Consider
Expeditors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Triton International Limited , FedEx Corporation (FDX - Free Report) and Herc Holdings Inc. (HRI - Free Report) . FedEx carries a Zacks Rank #2 (Buy), while Triton and Herc Holdings sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Triton, FedEx and Herc Holdings is pegged at 10%, 12% and 31.2%, respectively.
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