FedEx stock is soaring after the company announced a dividend increase.
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FedEx stock was soaring after the delivery company raised its dividend and said it would add three directors to its board in an agreement with activist investor DE Shaw.
FedEx stock has gained 8.8% to $218.66 at 9:16 a.m. Tuesday, while S&P 500 futures have risen 0.5% and Dow Jones Industrial Average futures have advanced 0.3%.
FedEx said it would raise its quarterly dividend by 53% to $1.15, up from $0.70. The dividend will be paid on July 11 to investors who owned the stock as of the end of trading on June 27. At current prices, the stock would yield 2.1%.
The company also added three directors in an agreement with DE Shaw and aid it would focus on shareholder returns and would tie executive compensation, in part, to those returns.
“Investors have been speculating about an activist at FDX for years, without one materializing,” writes Stephens analyst Jack Atkins. “Now, with a new leadership team and fresh voices on the board (including a proven operator like Mr. Vena), we are hopeful that a new day is dawning at FDX.”
FedEx has had a tough 2022, with the stock down 22%. Barron’s Andrew Bary recommended buying the stock in April, arguing that a new CEO would help push the company forward while calling it “an inexpensive bet on higher margins, better earnings, and greater free cash flow.” Shares have dipped 1.1% since then, but have outperformed the S&P 500 by 13.5 percentage points.
Write to Ben Levisohn at [email protected]
