In a time marked by tariff tensions and trade disruptions impacting global markets, FedEx (FDX) has emerged as a notable dividend stock. As 2025 unfolds, the transportation and logistics sector is going through a storm of protectionist policies, with new U.S. tariffs threatening to shave up to 0.65% off GDP and cost nearly 600,000 full-time jobs, according to recent estimates. 

This climate of uncertainty has weighed heavily on industry peers. United Parcel Service (UPS), for example, projects an 8.5% drop in average daily volumes for 2025 and has seen its stock slide more than 23% year-to-date.

Yet, while rivals struggle to maintain momentum, FedEx is leveraging hard-earned experience from the pandemic era to weather the latest round of trade turbulence. 

CEO Raj Subramaniam says the tough times during the pandemic taught the company how to handle these ups and downs.

However, the real question for investors is whether FedEx’s current price and steady dividend make it a smart buy at these lows, or if the risks from tariffs are just too high. Let’s take a closer look.

How FedEx’s Numbers Stack Up Amid Global Uncertainty

FedEx (FDX) is a global logistics leader, moving everything from urgent documents to important freight all over the world. Its business relies on a huge, connected network that links shippers and receivers everywhere, making it a key player in global trade and strong enough to handle disruptions. 

That strength is being tested again as FedEx shares have dropped 20% over the past year and are down 25% so far this year. 

Despite this performance, FedEx’s leaders remain confident that they can lean on the lessons learned during the pandemic. 

On the financial side, FedEx is still holding steady. In its latest quarter, it reported diluted earnings per share of $3.76 and adjusted earnings of $4.51, helped by a $46 million tax benefit. The company is also buying back shares, spending $500 million this quarter as part of a $2.5 billion plan, which helps boost earnings per share. 

Looking at valuation, FedEx trades at a forward price-earnings ratio of 11.62x, well below the sector average of 17.01x, which suggests the market expects some challenges. Still, with a PEG ratio of 1.09x and a beta of 1.24x over five years, the stock looks reasonably priced for those ready to handle some ups and downs.

What Powers FedEx’s Growth

CEO Raj Subramaniam has praised the FedEx team for keeping profits up even when things got tough, like during busy seasons and bad weather. He says the company is focused on making changes that improve how it works and help customers, which shows FedEx isn’t just getting by — it’s getting stronger.

For people thinking about investing, the basics look good too. FedEx’s yearly dividend yield is 2.62% ($5.52 per share), which is better than the 2.36% average for similar companies. 

While FedEx has only increased its dividend for one year in a row, paying out dividends every quarter and keeping the payout ratio low at 24.3% means there’s stability and room to grow. All of this shows that FedEx isn’t being thrown off by tariff troubles, it’s setting itself up to do well and reward its shareholders.

Analyst Insights: Can FedEx Keep Outpacing the Trade Disruptions?

FedEx is adjusting its outlook for fiscal 2025 but still looks steady. The company now expects revenue to be flat or just a little lower than last year, a small change from its earlier forecast of about the same revenue. 

Earnings per share before some accounting adjustments are expected to be between $15.15 and $15.75, down from the previous range of $16.45 to $17.45. When you take out costs related to business changes, legal issues, and the planned spin-off of FedEx Freight, the adjusted earnings per share are expected to be $18.00 to $18.60, a bit lower than the earlier $19.00 to $20.00. 

FedEx is also cutting capital spending to $4.9 billion from $5.2 billion, focusing more on improving its network and using automation. The company is sticking with its DRIVE program, aiming to save $2.2 billion in costs, and expects its tax rate to be about 24% before certain adjustments.

Even with these cuts, analysts are positive. All 30 surveyed give FedEx a “Moderate Buy” consensus rating. The average price target is $284.34, which means about a 35% gain from the current price. 

Big investors seem confident in FDX’s prospects too. Bill Gates bought 1 million shares of its stock in Q3 2024, a move analysts see as a bet on FedEx’s shift toward logistics-as-a-service. This shift should also help it handle tariff impacts.

Conclusion

FedEx has shown it can handle whatever global trade throws its way, drawing on hard-earned lessons from past disruptions and a clear focus on efficiency. While near-term forecasts are a bit muted, the company’s steady dividend, disciplined cost-cutting, and ongoing investments in its network keep it firmly in the game.