With supply chain issues negatively impacting the global economy, it should come to no surprise that the industrials sector has been trading close but better than the overall S&P 500, as the sector is down 10.3% year-to-date, as of Sept. 9. When looking deeper into the industries within the industrials sector, we found that the air freight and logistics industry is down 10.8% year-to-date, lagging behind its own sector.
According to MENAFN, the Global Air Freight Market is estimated to be $288 billion in 2022 and is expected to reach $379 billion by 2027, growing at a CAGR of 5.6%. As the global economy still struggles due to supply chain issues and geopolitical tensions in the Ukraine, air freight and logistics stocks should see steady demand as economic activity picks up.
Additionally, with back to school kicking into full gear and the holiday season right around the corner for the United States, here are 3 air freight and logistics stocks to benefit from steady consumer demand, easing inflation, and solid dividend yields.
Expeditors International Of Washington Inc EXPD is offering a dividend yield of 1.30% or $1.34 per share annually, through semiannual payments, with an aristocratic track record of increasing its dividends for 29 years. Expeditors International is a non-asset-based third-party logistics provider, mainly focused on international freight forwarding, and operates more than 200 full-service office locations worldwide, in addition to numerous satellite locations, as of 2021.
Bradley S. Powell, senior vice president and chief financial officer, mentioned in the second quarter earnings release that, “All of our products performed well during the quarter and we returned $659 million to shareholders in repurchased stock and dividends. Given the current economic uncertainty and government actions aimed at taming inflation, along with the ongoing challenges throughout the global supply chain, we believe that rates will continue to be highly volatile at least through the end of the year, while generally continuing to trend downwards from their highs over the longer-term”.
FedEx Corp FDX is offering a dividend yield of 2.20% or $4.60 per share annually, using quarterly payments, with a decent track record of increasing its dividends for two years. FedEx pioneered overnight delivery in 1973 and remains the world's largest express package provider, as of 2021.
During fiscal 2022 FedEx repurchased $2.2 billion of its common stock, and expects to repurchase $1.5 billion of its shares during the first half of fiscal 2023.
Forward Air Corp FWRD is offering a dividend yield of 0.98% or 96 cents per share annually, making quarterly payments, with a track record of increasing its dividends once in the past year. Forward Air is an asset-light freight and logistics company, and also offers customers local pick-up and delivery and other services including final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage, and other handling.
Tom Schmitt, Chairman, President and CEO of Forward Air said in the second quarter's press release that, “In the past five years, we have returned approximately $376 million to shareholders in the form of dividends and share repurchases. Our confidence in the growth potential of our business is reflected in the increase to our quarterly dividend and continued share repurchases in 2022.”
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