Despite severe supply-side challenges, inflation, rising fuel prices, and interest rate increases, several shipping companies have performed well.
So, quality shipping service stocks FedEx Corporation (FDX), Deutsche Post AG (DPSGY), and Kuehne + Nagel International AG (KHNGY) could be worth adding to your watchlists.
The North America shipping agency market is expected to grow at 4.5% CAGR until 2028. Moreover, the marine freight transportation industry is growing as a result of rising exports, client demand, and the establishment of new regional trade centers.
According to Market Research Future’s (MRFR) research report, the cargo shipping market is expected to expand at a CAGR of 5.2% until 2030. The cargo shipping market is an important component of the worldwide economy, and its growth is driven by the increase in international trade, demand for raw materials and commodities, e-commerce, and the global middle class.
Let us look deeper into the fundamentals of the featured stocks.
FedEx Corporation (FDX)
FDX provides transportation, e-commerce, and business services in the United States and internationally. The company’s FedEx Express segment offers express transportation, small-package ground delivery, and freight transportation services; time-critical transportation services; and cross-border enablement, technology, and e-commerce transportation solutions.
FDX’s forward EV/Sales multiple of 1 is 40.6% lower than the industry average of 1.69. Its forward EV/EBITDA multiple of 9.70 is 11.6% lower than the industry average of 10.98.
FDX’s trailing-12-month CAPEX/Sales of 7.35% is 157% higher than the industry average of 2.86%. Its trailing-12-month asset turnover ratio of 1.09% is 36.6% higher than the industry average of 0.80%.
FDX’s service segment revenue increased 33.8% year-over-year to $87 million in the fiscal third quarter, which ended February 28, 2023. The company’s total operating expenses decreased 5.3% year-over-year to $21.13 billion, while ground segment operating income increased 31.7% year-over-year to $844 million.
The consensus revenue estimate of $91.27 billion for the year ending May 2024 represents a marginal increase year-over-year. Its EPS is expected to grow 23.3% year-over-year to $18.33 for the same period. FDX’s shares have gained 45% over the past nine months to close the last trading session at $233.46.
FDX’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
FDX has a B grade for Quality. Within the B-rated Air Freight & Shipping Services industry, it is ranked #6 out of 15 stocks. Click here for the additional POWR Ratings for Growth, Value, Sentiment, Momentum, and Stability for FDX.
Deutsche Post AG (DPSGY)
Headquartered in Bonn, Germany, DPSGY operates as a mail and logistics company in Germany, rest of Europe, the Americas, the Asia Pacific, the Middle East, and Africa. The company operates through five segments: Express; Global Forwarding, Freight; Supply Chain; eCommerce Solutions; and Post & Parcel Germany.
DPSGY’s forward EV/Sales multiple of 0.81 is 52.2% lower than the industry average of 1.69. Its forward Price/Sales multiple of 0.62 is 53.9% lower than the industry average of 1.34.
DPSGY’s trailing-12-month ROCE of 21.85% is 56.8% higher than the industry average of 13.94%. Its trailing-12-month ROTC of 10.58% is 51.8% higher than the industry average of 6.97%.
DPSGY’s current provisions and liabilities came in at €21.20 billion ($23.17 billion) for the period that ended March 31, 2023, compared to €22.42 billion ($24.50 billion) for the period that ended December 31, 2022. Its total liabilities came in at €67.35 million ($73.59 billion), compared to €68.28 million ($74.60 billion) in the same period.
Street expects DPSGY’s revenue to increase marginally year-over-year to $96.23 billion for the year ending December 2023. Its EPS is expected to grow 13.3% year-over-year to $4.10 for the same period. It surpassed EPS estimates in all four trailing quarters. Over the past nine month, the stock has gained 43.7% to close the last trading session at $48.23.
It’s no surprise that DPSGY has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Stability and a B grade for Value and Quality. It is ranked #4 in the same industry.
Beyond what is stated above, we’ve also rated DPSGY for Growth, Momentum, and Sentiment. Get all DPSGY ratings here.
Kuehne + Nagel International AG (KHNGY)
Based in Schindellegi, Switzerland, KHNGY, together with its subsidiaries, provides integrated logistics services worldwide. The company operates through Sea Logistics; Air Logistics; Road Logistics; and Contract Logistics segments.
KHNGY’s forward EV/Sales multiple of 1.05 is 37.9% lower than the industry average of 1.69. Its forward EV/EBITDA multiple of 10.72 is 2.4% lower than the industry average of 10.98.
KHNGY’s trailing-12-month ROCE of 56.50% is 305.3% higher than the industry average of 13.94%. Its trailing-12-month ROTC of 33.59% is 381.8% higher than the industry average of 6.97%.
KHNGY’s current liabilities came in at CHF6.85 billion ($7.66 billion) for the period that ended March 31, 2023, compared to CHF7.81 billion ($8.73 billion) for the period that ended December 31, 2022. Its total liabilities and equity came in at CHF14.08 million ($15.74 billion), compared to CHF14.75 million ($16.49 billion) in the same period.
Analysts expect KHNGY’s EPS to come in at $2.53 for the year ending December 2023. The stock has gained 26% over the past year to close the last trading session at $58.39.
The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #5 in the same industry. It has an A grade for Quality and a B for Stability. To see additional KHNGY’s ratings for Value, Sentiment, Momentum, and Growth, click here.
What To Do Next?
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FDX shares were trading at $233.46 per share on Monday afternoon, down $2.98 (-1.26%). Year-to-date, FDX has gained 36.31%, versus a 15.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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