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Here's Why You Should Retain Expeditors (EXPD) Stock Now
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Expeditors International of Washington, Inc. (EXPD - Free Report) is being aided by solid liquidity and shareholder-friendly measures. However, rising expenses are worrisome.
Factors Favoring EXPD
We are impressed by Expeditors' efforts to reward shareholders through dividend payments and buybacks. In the COVID-19-ravaged 2020, the company repurchased 4.6 million shares at an average price of $72.26 per share. During 2021 and 2022, EXPD repurchased 4.4 million and 14.5 million shares of common stock at an average price of $117.54 and $108.88 per share, respectively.
In May 2022, management had announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34). In May 2023, EXPD hiked its dividend by 3%, thereby raising its semi-annual cash dividend to 69 cents per share.
Expeditors' increasing current ratio (a measure of liquidity) is encouraging. The ratio was 2.42 at the end of first-quarter 2023 compared with 2.20 at fourth-quarter 2022 end.
Key Risks
Expeditors is being hurt by the increase in operating expenses. Notably, operating expenses increased more than 4% year over year in 2022 despite the company's cost-cutting initiatives to combat weak demand. High operating expenses are restricting bottom-line growth.
Zacks Rank & Key Picks
Currently, EXPD carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1(Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022.
Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 364.5% and 192%, respectively, on a year-over-year basis.
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Here's Why You Should Retain Expeditors (EXPD) Stock Now
Expeditors International of Washington, Inc. (EXPD - Free Report) is being aided by solid liquidity and shareholder-friendly measures. However, rising expenses are worrisome.
Factors Favoring EXPD
We are impressed by Expeditors' efforts to reward shareholders through dividend payments and buybacks. In the COVID-19-ravaged 2020, the company repurchased 4.6 million shares at an average price of $72.26 per share. During 2021 and 2022, EXPD repurchased 4.4 million and 14.5 million shares of common stock at an average price of $117.54 and $108.88 per share, respectively.
In May 2022, management had announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34). In May 2023, EXPD hiked its dividend by 3%, thereby raising its semi-annual cash dividend to 69 cents per share.
Expeditors' increasing current ratio (a measure of liquidity) is encouraging. The ratio was 2.42 at the end of first-quarter 2023 compared with 2.20 at fourth-quarter 2022 end.
Key Risks
Expeditors is being hurt by the increase in operating expenses. Notably, operating expenses increased more than 4% year over year in 2022 despite the company's cost-cutting initiatives to combat weak demand. High operating expenses are restricting bottom-line growth.
Zacks Rank & Key Picks
Currently, EXPD carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1(Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022.
Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 364.5% and 192%, respectively, on a year-over-year basis.