With a market cap of $19.6 billion, Expeditors International of Washington, Inc. (EXPD) is a global logistics provider offering airfreight, ocean freight, customs brokerage, warehousing, and end-to-end supply chain solutions across the Americas, Europe, North Asia, South Asia, and MAIR. It serves industries such as retail, electronics, healthcare, technology, and manufacturing with specialized services including trade compliance, cargo insurance, and shipment monitoring. Shares of the Bellevue, Washingto ...

Core Insights - United Parcel Service (UPS) and Expeditors International of Washington (EXPD) have both increased dividends this year, demonstrating their commitment to shareholders despite economic uncertainty [1] Dividend Increases - UPS raised its quarterly cash dividend from $1.63 to $1.64 per share, resulting in an annual payout of $6.56, up from $6.52 [2] - EXPD approved a 5.5% increase in its semi-annual dividend, raising it from $0.73 to $0.77 per share, with a payout ratio of 25 and a five-year dividend growth rate of 8% [3] Dividend Sustainability Concerns - UPS's high dividend payout ratio raises concerns about the sustainability of its dividend, as it has a significant share of net income distributed as dividends [4] - Free cash flow for UPS has been declining, with a peak of $9 billion in 2022, and is projected to be $6.3 billion by the end of 2024, only slightly above dividend payments of $5.4 billion [5][6] Price Performance Comparison - EXPD has outperformed UPS with a 31% stock gain over the past six months, while UPS has seen disappointing performance due to soft revenue trends [8][10] - UPS's subdued stock performance is attributed to geopolitical tensions and elevated inflation affecting consumer confidence and growth expectations [11] Earnings Estimates - The Zacks Consensus Estimate for EXPD's 2025 sales indicates a 3.9% year-over-year increase, while UPS's 2025 sales estimate implies a 3.4% year-over-year decrease [13][14] - EXPD's 2025 EPS estimate shows a 3.5% year-over-year increase, contrasting with UPS's expected 10.7% year-over-year decrease [14] Valuation Metrics - EXPD is trading at a forward sales multiple of 1.77X with a Value Score of D, while UPS has a forward sales multiple of 0.9X and a Value Score of B [16] - The higher valuation of EXPD suggests that investors are willing to pay a premium for its stock compared to UPS [18] Conclusion - EXPD's stronger price performance and upward earnings estimate revisions indicate improving air freight tonnage and effective cost-cutting measures, making it a more attractive investment compared to UPS [19]