FedEx Raises Dividend, Inventory Jumps 9%. Is ‘New Day Dawning?’

Textual content dimension

FedEx

inventory was hovering after the supply firm raised its dividend and mentioned it will add three administrators to its board in an settlement with activist investor DE Shaw.

FedEx inventory has gained 8.8% to $218.66 at 9:16 a.m. Tuesday, whereas

S&P 500
futures have risen 0.5% and

Dow Jones Industrial Average
futures have superior 0.3%.

FedEx mentioned it will elevate its quarterly dividend by 53% to $1.15, up from $0.70. The dividend might be paid on July 11 to buyers who owned the inventory as of the tip of buying and selling on June 27. At present costs, the inventory would yield 2.1%.

The corporate additionally added three administrators in an settlement with DE Shaw and help it will concentrate on shareholder returns and would tie government compensation, partly, to these returns.

“Traders have been speculating about an activist at FDX for years, with out one materializing,” writes Stephens analyst Jack Atkins. “Now, with a brand new management crew and recent voices on the board (together with a confirmed operator like Mr. Vena), we’re hopeful {that a} new day is dawning at FDX.”

FedEx has had a troublesome 2022, with the inventory down 22%. Barron’s Andrew Bary recommended buying the stock in April, arguing {that a} new CEO would assist push the corporate ahead whereas calling it “a cheap guess on larger margins, higher earnings, and better free money movement.” Shares have dipped 1.1% since then, however have outperformed the S&P 500 by 13.5 proportion factors.

Write to Ben Levisohn at ben.levisohn@barrons.com