On Record Shipping Day, FedEx is a Buy: Analyst

On the day when shipping giant FedEx is expecting to handle a record number of packages—16 million—one analyst put a buy on the stock, while another, likes both FedEx and its rival UPS equally.

FedEx expects Monday to be the busiest shipping day in its history, with online sales driving the traffic.

“I think FedEx is a much better investment,” said Donald Broughton, senior research analyst at Avondale Partners. “Twenty-seven percent of its revenue comes from international; only 17 percent of UPS’s does. You have a much better broad reach globally [with FedEx].”

Kevin Sterling, transportation analyst, at BB&T Capital Markets, called both shippers “attractive investments” with large international exposure. “If you look at UPS , it’s got a nice dividend and it is going to increase that next year,” he added.

“They [UPS] are going to get aggressive with the share buybacks, and also, UPS has the higher return characteristics and it has the higher margins than FedEx despite being unionized.”


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Disclosure information was not available for Donald Broughton or his company.