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If you’ve delivered or received packages in the last 50 years, you’re probably familiar with FedEx Corp. (NYSE: FDX), formerly known as Federal Express. The company has expanded from offering domestic shipping services for packages and freight to become a multinational delivery services company.
FedEx Freight delivery truck. Source: FedEx.com
FedEx now provides information technology (IT), marketing, technical support, customer service, billing and collection and other back office support services to its clients. If you’ve considered investing in the shipping services sector, keep reading to find out how to buy FDX stock.
How to Buy Fedex Corp (FDX) Stock
You can purchase FDX stock either directly from FedEx or via reputable online stock brokers. Our step-by-step guide to buying FDX stock appears below.
- Pick a brokerage.
Trading in U.S. listed stocks can be done through most reputable online stockbrokers, such as E*TRADE, Charles Schwab, TD Ameritrade, Robinhood and Webull. All of these stockbrokers offer commission free trading and rank among the best brokers for trading U.S. stocks.
If you’re a new investor or have already invested in FDX stock and prefer to buy shares directly from the company, you might qualify to buy shares via FedEx’s shareowner services division. Computershare is FedEx’s stock transfer agent that administers and sponsors the Computershare Investment Plan for FedEx Corporation Common Stock.
The Computershare direct FedEx stock purchase plan has a minimum initial $1,000 investment for new shareholders with a subsequent minimum additional purchase amount of $50. Cash purchases are limited to an aggregate $250,000 annual amount. In addition to paying cash dividends, Computershare also offers full or partial dividend reinvestment options. - Decide how many shares you want.
To calculate how many shares you can buy, you divide the amount of capital you want to invest in FedEx by the current price per share. For example, if you have $20,000 to invest today at the stock’s $280 per share level, you could purchase 71.42 shares of FDX stock.
Fractional shares can be bought through some brokers, so ask your broker if they provide this service. If not, then you could just purchase 71 shares at $280 for a total investment of $19,880. - Choose your order type.
The principal order types for stock market trades are:
• Market order: An order filled at the best possible price immediately available in the market at the time the order is entered for the full amount of the order. A market order is generally filled near the current bid price for a sell order or near the ask price for a buy order.
• Limit order: When you have a specific price that you want to buy shares at, you can use a limit order to instruct your broker to buy at that price or better. In general, a limit buy order is set at a lower price than the prevailing market offer price, while a limit sell order is set at a higher price than the current market bid.
• Stop loss order: An order to buy or sell a stock once it reaches a specific price that is worse than the prevailing market price. Once that stop price trades, the stop loss order becomes a market order to be filled immediately at the best available price.
Orders can also have a time component as follows:
• Day order: An order that expires at the market close is considered a day order. This time limit will generally apply to orders unless you specify otherwise.
• Good ‘Til Cancelled (GTC) order: An order that remains outstanding until either the price of the stock trades at its level or the order is cancelled by the client. Some brokers have a limit of 60 days for GTC orders, so check with your broker to find out if a time limit applies. - Execute your trade.
After you’ve determined how many shares you want to buy with the funds in your account, and the price you wish to pay, you are now ready to enter a buy order with your stock broker. You can initially enter a market or limit order as a day or GTC order. Once you’ve entered your order, your broker would proceed to execute the order as appropriate and if market conditions allow.
Best Online Stockbrokers
Below is our list of the best brokers for your consideration.
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
FedEx Stock History
Founded by Frederick W. Smith in 1971 to address the inadequacy of the airfreight business, Federal Express began operations in Little Rock, Arkansas in 1971. After relocating to Memphis, Tennessee, the company began official operations in April 1973. Federal Express opened for business with 389 employees and an order to ship 189 packages to 25 U.S. cities.
Federal Express Corp.’s initial public offering (IPO) took place on April 12, 1978 at $24 per share. Federal Express Corp. stock began trading on the New York Stock Exchange on December 28th, 1978 under the symbol FDX, which is now used by its present iteration FedEx Corp.
Since then, FedEx Corp. has acquired numerous firms, expanding its footprint throughout the world. Its UK acquisitions began in 2006 with the purchase of ANC Holdings Ltd. Subsequent purchases included freight and cargo companies in China, Hungary, India, Mexico, Poland, France, Brazil, Africa, North and South America and Europe. The company is now divided into Services, Ground, Freight, Office and Logistics departments.
A daily candlestick chart of Fedex Corp.’s stock price since March 2020 showing volume and dividend payment dates below. Source: Benzinga Pro.
FDX stock currently trades just under $280 per share, resulting in a market capitalization of $74.34 billion for the company. FedEx’s latest quarterly earnings report showed net income of $939 million on adjusted revenue of $21.5 billion, resulting in earnings per share (EPS) of $3.47. This compares favorably to the previous year’s third quarter results of net income of $371 million on $17.5 billion in revenue and earnings of $1.41 per share.
FDX Restrictions for Retail Investors
Retail investors have no restrictions when it comes to buying FDX. If you are a U.S. trader who plans to actively trade FDX stock, however, then you should be aware of the FINRA rules regarding pattern day traders, who are required to maintain a margin account with a minimum balance of $25,000 at all times.
Basically, if you trade in and out of a particular stock within the same day, you have performed a “day trade”. If you do that 4 or more times within a 5 business day period, then you are classified as a pattern day trader.
Pros and Cons of FDX
Pros
- Low price/earnings ratio (PE): Compared to its competitor UPS’s PE ratio of 111.66, FDX stock currently has a PE ratio of only 24. This makes FedEx seem undervalued in comparison to UPS (NYSE: UPS).
- Increased demand for FedEx’s services: FedEx stands to capitalize on greater demand for its e-commerce and international express delivery services after consumers got used to buying from home during the COVID-19 pandemic.
- Dividend: FedEx pays a $0.65 quarterly dividend and paid total dividends of $2.60 per share for its 2021 fiscal year.
Cons
- COVID-19 pandemic subsides: FedEx Corp. has increased its services provided, and its stock has tripled since March 2020 when the U.S. COVID-19 pandemic shutdowns started. A significant slowdown in the company’s business activity after the pandemic subsides could lead to a lower FDX stock price.
- High share price: FDX stock currently trades at $280, making it a costly stock for smaller investors to buy.
Take a Look at FDX Stock
While many companies have suffered from the COVID-19 lockdowns, the pandemic triggered a huge demand for residential delivery services. Although this boosted FedEx’s business and stock price substantially, a correction has already occurred from late December 2020 to early February of this year as the market anticipated a return to normal operating conditions.
Despite a subsequent choppy rise in FDX’s share price, another correction lower may materialize in the near future as world economies reopen, especially if FedEx sees a reduced demand for its services as a result. Waiting to buy FDX stock at lower levels may make the most sense if you still want to invest in FedEx for an extended period.
Frequently Asked Questions
Does FDX stock pay a dividend?
Yes. The company pays a quarterly dividend of $0.65 and paid dividends of $2.60 for fiscal year 2021.
About Luke Jacobi
Luke Jacobi is a distinguished professional known for his role as President at Benzinga, a renowned financial media outlet. With a background in business operations and management, Luke brings valuable expertise to his position, overseeing various aspects of Benzinga’s operations. His contributions play a crucial role in the company’s success, ensuring efficiency and effectiveness across different departments. Prior to his role at Benzinga, Luke has held positions that have honed his skills in leadership and strategic decision-making. With a keen understanding of the financial industry and a commitment to driving innovation, Luke continues to make significant contributions to Benzinga’s mission of providing high-quality financial news and analysis.