We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FDX vs. WAB: Which Dividend-Paying Transportation Stock Has an Edge?
Read MoreHide Full Article
Key Takeaways
WAB and FDX both hiked dividends this year, underscoring their shareholder-friendly stance.
WAB gains steam from new tech, cost cuts and global rail expansion, while FDX lags on weak demand.
Earnings estimates for WAB trend upward, unlike those for FDX, though its valuation now looks relatively high.
FedEx Corporation (FDX - Free Report) and Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , operating as Wabtec Corporation, are two prominent names in the Zacks Transportation sector. Both companies have announced dividend hikes this year despite the prevalent economic uncertainties, reflecting their shareholder-friendly approach.
Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty, like the current scenario.
In February, Wabtec’s board of directors approved a dividend hike of 25%, thereby raising its quarterly cash dividend to 25 cents per share ($1.00 annualized) from 20 cents (80 cents annualized). In June, FDX’s board of directors approved a dividend hike, thereby raising its quarterly cash dividend to $1.45 per share ($5.8 annualized) from $1.38 ($5.52 annualized).
The dividend-paying abilities of both transportation stocks are pretty impressive. Now, let’s delve deeper to compare other relevant metrics to determine which stock, WAB or FDX, is a better investment now.
Price Performance: How Do They Compare
WAB has navigated the recent tariff-induced stock market volatility well, registering a 2.4% year-to-date gain, while FDX stock has declined in double digits.
YTD Price Comparison
Image Source: Zacks Investment Research
FDX’s lackluster price performance is mainly due to the revenue weakness as geopolitical uncertainty and high inflation continue to hurt consumer sentiment and growth expectations. The weak demand scenario has led to a decline in the volume of packages shipped.
On the other hand, WAB’s recent strength is driven by its focus on new technologies to improve safety and reliability, in addition to its restructuring actions and cost-cutting initiatives. WAB’s focus on new technologies enhances the safety, cost and reliability of railroads, supporting the modernization of global rail fleets. Of late, WAB has introduced a number of significant new products, including PTC equipment that includes onboard digital data and global positioning communication protocols.
Wabtec and Intermodal Telematics B.V., a Dutch leader in rail telematics technology, recently expanded their partnership through an agreement granting Wabtec exclusive distribution rights for IMT’s telematics solutions across the European market. This move positions Wabtec as the sole distributor of IMT’s railcar telematics systems in key European freight markets.
Other major expansion-oriented deals inked by WAB include a multiyear Tier 4 locomotive order in North America valued at over $600 million, a multi-year service contract with a customer in Brazil worth over $240 million, a long-term parts agreement with a customer in Asia, and a multi-year order for new locomotives in Africa. The recent new order wins in Kazakhstan are expected to boost revenues further. The improving global rail supply market in the post-COVID scenario is another positive for the company. The Association of the European Rail Industry, UNIFE, expects the global market for railway systems and services to grow at an annual average of around 3% until 2027-29.
How Do Zacks Estimates Compare for WAB & FDX?
The Zacks Consensus Estimate for WAB’s 2025 and 2026 sales implies a year-over-year increase of 6.7% and 5.8%, respectively. The consensus mark for WAB’s 2025 EPS highlights a 17.5% year-over-year drop. The consensus mark for 2026 EPS suggests an 11.5% year-over-year increase. Moreover, EPS estimates for 2025 and 2026 have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FDX’s current year sales implies a 4.4% year-over-year increase and the same for the next fiscal year implies a 3.9% year-over-year increase. The consensus mark for FDX’s current fiscal year EPS highlights a 1.4% year-over-year decrease. The same for the next year implies a 13.8% year-over-year increase. The annual EPS estimates for the current and next fiscal years have been trending southward over the past 60 days.
Image Source: Zacks Investment Research
WAB Appears to Be Pricier Than FDX
WAB is trading at a forward sales multiple of 2.85, above its median of 2.07 over the last five years. WAB has a Value Score of D. Meanwhile, FDX has a Value Score of A, with its forward sales multiple at 0.58, below its 5-year median of 0.69.
Image Source: Zacks Investment Research
Conclusion
WAB’s expensive valuation (compared to its 5-year median) seems to suggest that investors are to pay a premium for this key player in the transportation sector. Agreed that both stocks focus on paying dividends, WAB’s better price performance and northward earnings estimate revisions highlight the fact that its focus on new technologies to improve safety and reliability, apart from its cost-cutting actions, is working well.
Given its better prospects, WAB seems to have an edge over FDX now.
While WAB carries a Zacks Rank #3 (Hold), FDX is currently #4 Ranked (Sell).
Image: Bigstock
FDX vs. WAB: Which Dividend-Paying Transportation Stock Has an Edge?
Key Takeaways
FedEx Corporation (FDX - Free Report) and Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , operating as Wabtec Corporation, are two prominent names in the Zacks Transportation sector. Both companies have announced dividend hikes this year despite the prevalent economic uncertainties, reflecting their shareholder-friendly approach.
Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty, like the current scenario.
In February, Wabtec’s board of directors approved a dividend hike of 25%, thereby raising its quarterly cash dividend to 25 cents per share ($1.00 annualized) from 20 cents (80 cents annualized). In June, FDX’s board of directors approved a dividend hike, thereby raising its quarterly cash dividend to $1.45 per share ($5.8 annualized) from $1.38 ($5.52 annualized).
Wabtec Dividend Yield (TTM)
Wabtec dividend-yield-ttm | Wabtec Quote
FedEx Corporation Dividend Yield (TTM)
FedEx Corporation dividend-yield-ttm | FedEx Corporation Quote
The dividend-paying abilities of both transportation stocks are pretty impressive. Now, let’s delve deeper to compare other relevant metrics to determine which stock, WAB or FDX, is a better investment now.
Price Performance: How Do They Compare
WAB has navigated the recent tariff-induced stock market volatility well, registering a 2.4% year-to-date gain, while FDX stock has declined in double digits.
YTD Price Comparison
FDX’s lackluster price performance is mainly due to the revenue weakness as geopolitical uncertainty and high inflation continue to hurt consumer sentiment and growth expectations. The weak demand scenario has led to a decline in the volume of packages shipped.
On the other hand, WAB’s recent strength is driven by its focus on new technologies to improve safety and reliability, in addition to its restructuring actions and cost-cutting initiatives. WAB’s focus on new technologies enhances the safety, cost and reliability of railroads, supporting the modernization of global rail fleets. Of late, WAB has introduced a number of significant new products, including PTC equipment that includes onboard digital data and global positioning communication protocols.
Wabtec and Intermodal Telematics B.V., a Dutch leader in rail telematics technology, recently expanded their partnership through an agreement granting Wabtec exclusive distribution rights for IMT’s telematics solutions across the European market. This move positions Wabtec as the sole distributor of IMT’s railcar telematics systems in key European freight markets.
Other major expansion-oriented deals inked by WAB include a multiyear Tier 4 locomotive order in North America valued at over $600 million, a multi-year service contract with a customer in Brazil worth over $240 million, a long-term parts agreement with a customer in Asia, and a multi-year order for new locomotives in Africa. The recent new order wins in Kazakhstan are expected to boost revenues further. The improving global rail supply market in the post-COVID scenario is another positive for the company. The Association of the European Rail Industry, UNIFE, expects the global market for railway systems and services to grow at an annual average of around 3% until 2027-29.
How Do Zacks Estimates Compare for WAB & FDX?
The Zacks Consensus Estimate for WAB’s 2025 and 2026 sales implies a year-over-year increase of 6.7% and 5.8%, respectively. The consensus mark for WAB’s 2025 EPS highlights a 17.5% year-over-year drop. The consensus mark for 2026 EPS suggests an 11.5% year-over-year increase. Moreover, EPS estimates for 2025 and 2026 have been trending northward over the past 60 days.
The Zacks Consensus Estimate for FDX’s current year sales implies a 4.4% year-over-year increase and the same for the next fiscal year implies a 3.9% year-over-year increase. The consensus mark for FDX’s current fiscal year EPS highlights a 1.4% year-over-year decrease. The same for the next year implies a 13.8% year-over-year increase. The annual EPS estimates for the current and next fiscal years have been trending southward over the past 60 days.
WAB Appears to Be Pricier Than FDX
WAB is trading at a forward sales multiple of 2.85, above its median of 2.07 over the last five years. WAB has a Value Score of D. Meanwhile, FDX has a Value Score of A, with its forward sales multiple at 0.58, below its 5-year median of 0.69.
Conclusion
WAB’s expensive valuation (compared to its 5-year median) seems to suggest that investors are to pay a premium for this key player in the transportation sector. Agreed that both stocks focus on paying dividends, WAB’s better price performance and northward earnings estimate revisions highlight the fact that its focus on new technologies to improve safety and reliability, apart from its cost-cutting actions, is working well.
Given its better prospects, WAB seems to have an edge over FDX now.
While WAB carries a Zacks Rank #3 (Hold), FDX is currently #4 Ranked (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.