FedEx Corporation is one of the world’s largest express delivery service company that delivers roughly six million packages in a year, and employs more than 400k people as of 2019. This company has been in the industry for quite a time now, but from the start of the year, FedEx’s stock has been extremely volatile and seen big price swings in both directions. At present, the FedEx share price is up more than 80% so far this year.
If you are thinking of investing in FedEx shares, this guide can help you. We’ll take a close look at the FedEx stock price, and decide whether it is the right investment for you right now. We also suggest top UK stockbrokers that offer you to trade shares of FedEx and show you how to buy FedEx shares online in the UK.
- 1 Step 1: Find a UK Stock Broker That Offers FedEx Shares
- 2 Step 2: Research FedEx Shares
- 3 How Much Are FedEx Shares Worth? FedEx Share Price History
- 4 FedEx Shares Dividend Information
- 5 Should I Buy FedEx Shares?
- 6 Step 3: Open an Account and Deposit Funds
- 7 Step 4: Buy FedEx Shares
- 8 FedEx Shares: Buy or Sell?
- 9 The Verdict
- 10 eToro – Buy FedEx Shares With No Commission
- 11 FAQs
FedEx Corp shares trade on the New York Stock Exchange (NYSE) since the company went public in 1978. This means that if you want to invest in FedEx, you’ll have to find a UK stockbroker that allows users to buy and sell US shares. The good news is that finding a UK brokerage firm that enables users to trade US shares including shares of FedEx should not be a big problem.
With that in mind, you want to make sure you choose a stockbroker that not only gives you access to US share trading but also maintains a fair commission policy, is heavily regulated, and provides a top-notch trading platform and trading features.
To help you get started, below we have listed two of the best UK stockbrokers to trade FedEx shares in the UK.
1. eToro – A Commission Free Social Trading Trading Platform
eToro is a great trading platform for traders seeking zero-commission stock trades, and a social trading experience. Founded in 2006, this broker offers one of the largest trading communities in the world with around 12 million registered users on its platform. It is also one of the few brokers in the UK that allows investors to take advantage of ‘fractional trading’, which simply means you’ll be able to trade fractional shares of a company, an option that is not available on the majority of UK stockbrokers.
As eToro offers shares from US stock markets, you will get access to shares like Amazon, Netflix, Facebook, Google, Shopify, and FedEx. These shares can be traded directly from the stock exchanges or in the form of a contract for Difference (CFDs). By using CFDs, you can basically speculate on the price of an asset without owning the security. While there are some disadvantages to buy and sell CFDs, the advantages overweigh the disadvantages. As such, you can buy FedEx shares with leverage of 5:1, and easily short sell the stock without any restrictions, as often happens with investment brokerage firms.
Another reason to trade with eToro is its zero commission policy on all the assets it offers to trade on. This means you do not have to pay any fixed trading commissions when you buy shares, rather than the buy and sell spread. eToro is also widely known as a social trading platform, meaning you join a community of investors where you can interact with other members and automatically copy trades of other traders by using a feature called the CopyTrade tool.
To get started, eToro requires UK investors to meet a minimum deposit requirement of $200. As the broker operates in USD, there is a small conversion fee for depositing in GBP. In terms of regulation and the security of funds, eToro is heavily regulated by CySEC, FSA, and FCA in the United Kingdom. Moreover, clients’ funds are protected by the FSCS (up to the first £85,000).
- Commission-free share trading platform
- You’ll get access to shares, ETFs, currency pairs, commodities, indices and cryptocurrencies
- Allows you to buy shares outright or CFDs
- Supports fractional trading
- Social trading platform
- Accepts a wide range of payment methods, including PayPal
- User-friendly web platform and mobile trading app
- Regulated by the FCA
- Limited technical analysis charting package and trading tools for advanced traders
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Skilling – Buy FedEx Shares on Various Trading Platforms
Founded in 2016, Skilling is an online trading platform that offers users to trade on a huge range of assets via the Skilling WebTrader, Skilling cTrader, or the popular MetaTrader4. Even though this broker is relatively new, it has gained licenses from top agencies such as CySEC, FSA, and FCA. As such, retail clients can trade FedEx shares with a leverage ratio of 5:1 while professional investors can utilize a leverage of 10:1 on share trading.
In addition to shares, investors can also get access to forex, commodities, indices, and cryptocurrencies. Overall, Skilling gives investors access to 800 instruments with very competitive spreads, including more than 700 shares from the US, UK, and Europe. Another plus of trading with Skilling is the selection of trading platforms. The Cyprus-based broker offers its proprietary SkillingTrader, which is a web-based trading platform and is mostly suited for newbies. For intermediate and experienced traders, Skilling offers the MetaTrader4 or the cTrader. Take note that you are able to open a free demonstration account before risking real capital to test each one of the platforms.
To start, you need to meet a minimum deposit requirement of £/$/€100 for the Standard account and a minimum of £5000 for the Premium account.
- More than 700 share CFDs, including FedEx
- Commission-free share trading with tight spreads
- Range of three trading platform
- Supports algorithmic trading
- Supports the MetaTrader 4
- User-friendly mobile app for iOS and Android
- Does not support ETF trading
- Limited research and analysis tools
75% of retail investor accounts lose money when trading CFDs with this provider.
FedEx stock has been on a tear since the Covid-19 pandemic started in March 2020, largely due to the increase in online orders. Eventually, the FedEx stock reached an all-time high of $293.30 on October 20, and so far this year investors have enjoyed a return of nearly 80%. But before you make an investment in FedEx, it’s better to check all parameters and the company’s fundamentals.
To make things clearer, let’s analyze the FedEx share price historical performance and take a look at some of the reasons why FedEx might be a good long term investment.
FedEx was founded in 1971 by Frederick W. Smith who serves as the Chief Executive Officer of the company until the present time. The idea of Smith was first introduced when he was a student at Yale University and wrote a term paper explaining the business model for express delivery service. Ironically, his professor rejected the idea and responded: “The concept is interesting and well-formed, but in order to earn better than a ‘C’, the idea must be feasible.” But once Smith graduated from Yale, he then founded FedEx Express and the company was very soon surfing the waves of success.
Two years later in 1973, FedEx Express started its air operations from the Memphis airport with just 20 jet aircraft that delivered packages between 25 US cities. By 1976, the company has reported its first profit of $3.6mn, delivering 19,000 packages per day. By the late 70s and early 80s, FedEx grew rapidly right after it has acquired seven Boeing 727 aircraft and 1 Boeing 737 aircraft. To increase its expansion, FedEx went public in 1978 and by 1983, it reported for the first time revenues of $1bn. In 1998, FedEx acquired the Roadway Package System (RPS), now known as FedEx Ground. Smith’s has promoted the merger between FedEx and RPS in order to create a competitive service for UPS.
Since the early 90s, FedEx shares were trading in a long upward trajectory. However, between 2017-2019, FedEx shares fell by more than 50% despite steady revenue growth. That can be largely attributed to some complications in the FedEx and TNT merger and the termination of the shipping contract with Amazon in 2019.
Like most eCommerce businesses, FedEx had a strange year in 2020. In February, the FedEx share price fell by more than 60%, but since then FedEx has been one of the best performing shares in the market with an outstanding increase in value from its lowest yearly level of $90.49 per share to its all-time high of $287.40 on October 20.
FedEx Share Fundamentals – Market Cap, P/E Ratio and EPS
FedEx Corporation has a market capitalization of around $71bn as of November 2020. Its PE ratio currently stands at nearly 42, meaning investors are willing to pay $40 to claim $1 in earnings of the company. Best of all, FedEx’s EPS growth rate is extremely impressive. In Q3, it has reported an EPS of $4.72, which represents an increase of 66.2% year-over-year. FedEx 2020 annual EPS stands at $4.9, an increase of 141.38% from 2019.
FedEx is not yet providing an earnings forecast for fiscal 2021 year but it raised the capital spending outlook for the next year by $200 million to $5.1 billion in order to increase volume levels.
Since 2012, FedEx has been a favorite stock for dividend investors as it is consistently paying quarterly dividends and is expected to continue paying dividends in spite of the uncertainty caused by the Covid-19 pandemic. While FedEx’s 5-year average dividend yield of 1.08% is considered low for some investors, there are high expectations from Wall Street analysts and investors for an increase in FedEx’s earning distribution in 2021 due to growth in revenues in 2020.
FedEx share price has been on a major uptrend since the Covid-19 pandemic has changed the ecommerce world. Not only the company has reached an all-time valuation, but it has also outperformed its main competitors in the industry, UPS and United States Postal Service (USPS). And even though the shares of the American multinational delivery services company has declined from the all-time high in October, we still think there are many reasons why investors and analysts are bullish on this stock.
Outstanding Earnings Results
Over the past year, FedEx has reported truly impressive earnings. In the third quarter of the year, the shipping service giant reported an EPS of $4.87 per share for the Q1 fiscal year of 2021 from $19 billion in sales. That was way above analysts’ expectations of $2.70 in earnings per share on $17.5bn in sales. Moreover, the company has seen an increase from 8.8 million average daily package volume the year-before quarter to 11.6 million this quarter.
Clearly, the Covid-19 pandemic has had a positive impact on FedEx’s revenue growth. Looking ahead, Wall Street analysts predict that the trend is expected to continue, setting an EPS of $11 per share in the fiscal year of 2021.
Partnership with Microsoft
In May 2020, FedEx Corporation and Microsoft announced a collaboration that could ‘transform commerce’ by combining FedEx’s logistics network and Microsoft’s intelligent cloud technology. Although the two mega-companies did not reveal the details of the partnership, this collaboration will be, more than anything, an attempt to team up against Amazon. Moreover, the use of Microsoft technology could potentially improve FedEx’s supply chains and shipping logistics.
FedEx Drone Delivery
You might have heard about the future predictions that drones will be an integral part of online delivery services. So, for investors that are willing to bet on drone delivery technology, FedEx is a great long term investment. In 2019, FedEx Express launched the first commercial drone-delivery service, as well as the first scheduled e-commerce delivery via a drone delivery in the US. As the market for drone package delivery service is set for rapid growth in the next decade, FedEx is one of the top candidates in the race to develop accurate drone delivery systems along with Amazon, Airbus, Boeing, DHL, and Matternet.
Step 3: Open an Account and Deposit Funds
After you have made your market research, you can now proceed to the next step of buying FedEx shares. But before you can buy shares of FedEx, you first need to open an online trading account with one of our recommended brokers. To help you get started, we are now going to show the full process with eToro.
First, you need to go to the eToro official website and sign up for a free trading account.
You will then be prompted to a questionnaire where you need to create a username and password and answer basic questions about your occupation, trading background, and financial status. In addition, eToro also asks you to verify your identity in order to comply with the FCA requirements. You can do that by uploading a copy of your passport or driver’s license along with a copy of a recent financial statement or utility bill.
Then, once eToro sends you an account approval, you’ll be able to fund your account using one of the provided payment methods below:
- Debit Card
- Credit Card
- UK Bank Transfer
Now that you have completed the registration process and funded your account, you are ready to buy FedEx shares. In order to place an order in the market, navigate to eToro’s trading dashboard and type in FedEx or FDX in the search bar at the top of the screen.
On FedEx’s instrument page, click on the Buy button.
Now, you will be transferred to an order form where you can place a buying order. In the order form, enter the amount you want to invest in FedEx and then click on the Place Order button. Bear in mind that you can use fractional share ownership, meaning you do not have to buy or sell a full share of FedEx but trade any amount over £40.
Finally, navigate to your Portfolio on the left side menu to place stop loss and take profit orders. This is especially recommended if you are a newbie or you are not planning to be in front of the screen all day.
Overall, FedEx shares could be a good investment opportunity. In fact, the only reason for a pullback in the share price right now can be a Covid-19 vaccine that might end the eCommerce boom. But even in this case, it’s difficult to see FedEx’s share price fall drastically from its current valuation.
Overall, the company is still facing increasing competition from United Parcel Service (UPS) and Amazon. Additionally, there’s a question of whether FDX can perform that well for the long term and whether the eCommerce boom will continue in the next year. Nonetheless, the company’s valuation is actually in line with financials and fundamentals. Though it might seem that FedEx is currently overvalued compared to other package delivery services and competitors in the industry, some analysts think it is actually trading at a discount right now. As such, we still think FedEx is a solid investment with a stop loss rate of 20%-25%.
FedEx is one of the most important shipping services in the world and its share has been on a roll since March 2020. In the near future, we are not likely to see the demand for FedEx services fall drastically. The outlook for the shipping market in the next years is very optimistic, and as such, FedEx is expected to continue its growth in the upcoming years.
If you ready to buy FedEx shares, simply click the link below to get started!
67% of retail investor accounts lose money when trading CFDs with this provider.
Who is the chief executive of FedEx?
Fredrick W. Smith is the founder, chairman and CEO of FedEx corporation since the company was founded in 1971.
What stock exchange is FedEx listed on?
FedEx corporation is listed on the New York Stock Exchange (NYSE) under the ticker symbol FDX.
Does FedEx pay dividends?
Yes, FedEx typically pays four dividends per year, and has a dividend yield of 0.96% as of November 2020.
How do I buy shares of FedEx?
In order to buy FedEx shares, you need to find a UK stockbroker that offers you to trade US shares. As such, you'll be able to buy FedEx shares through any brokerage firm that connects you to the New York Stock Exchange, or find a CFD platform that allows you to speculate on the price of FedEx without actually owning the asset.
Can I invest in FedEx via an ISA or SIPP?
Absolutely. You will have to find, however, an ISA or SIPP account that allows you to purchase individual US shares.