With the growing globalization of trade and the prevalence of e-commerce around the world, the operations of freight and shipping companies have become more critical and essential for smooth functioning. Such trends, along with advanced technologies, are opening new avenues for the logistics market.
With the industry’s promising prospects, it could be wise to invest in fundamentally sound logistics stocks: United Parcel Service, Inc. (UPS), FedEx Corporation (FDX), and Radiant Logistics, Inc. (RLGT) amid supply chain disruptions.
Recent technological evolutions and rapid expansion of e-commerce have caused significant supply chain developments. Owing to these advancements, customers’ demands and requirements are also evolving towards faster, more efficient supply chains, prompting logistics companies to enhance their operations with innovative technologies.
Also, continued globalization of trade and easier access to resources are accelerating demand in different regions. Such trends have resulted in surging infrastructure and supply chain investments, propelling the freight and logistics market’s growth.
The Business Research Company projects that the global freight and logistics market will expand to $23.16 billion by 2029, exhibiting growth at a CAGR of 6.4%. The market's demand is attributable to factors like digital transformation, integration of AI and machine learning, advancements in transportation, and globalization and cross-border trade.
Given these encouraging trends, let’s look at the fundamentals of the three best Air Freight & Shipping Services stocks, beginning with the third choice.
Stock #3: United Parcel Service, Inc. (UPS)
UPS engages in the provision of package delivery and logistics services. The company operates in two segments: U.S. Domestic Package and International Package. The company offers time-definite delivery services for express letters, documents, packages, and palletized freight via air and ground services.
On February 5, 2025, UPS announced its regular quarterly dividend of $1.64 per share on all outstanding Class A and Class B shares, which is payable on March 6, 2025, to shareholders of record on February 18, 2025.
UPS’ annual dividend of $6.56 translates to a yield of 5.58% at the current share price. Its four-year average dividend yield is 3.43%. Moreover, the company’s dividend payouts have increased at a CAGR of 12.6% over the past three years. UPS has raised its dividends for 15 consecutive years.
On January 8, 2025, UPS completed the acquisition of Frigo-Trans and its sister company BPL, a leading provider of complex healthcare logistics solutions across Europe. The strategic acquisition enhanced UPS's end-to-end capabilities with end-to-end temperature-controlled solutions across Europe.
For the fourth quarter that ended December 31, 2024, UPS reported posted total revenue of $25.30 billion, up 1.5% year-over-year. The company’s non-GAAP adjusted operating profit increased 11.2% from the previous year’s quarter to $3.10 billion. Also, its non-GAAP adjusted net income and EPS came in at $2.36 billion and $2.75, up 11.5% and 11.3% from the prior-quarter quarter, respectively.
Analysts expect UPS’ revenue and EPS for the fiscal year (ending December 2026) to increase 2.1% and 12.4% year-over-year to $91.10 billion and $8.88, respectively. Further, the company has surpassed the consensus EPS estimates in three of the trailing four quarters.
UPS’ stock has declined 6.7% year-to-date to close the last trading session at $117.63.
UPS’ bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
UPS's stock has a B grade for quality. Within the Air Freight & Shipping Services industry, UPS is ranked #6 of 16 stocks.
Click here to access UPS' additional ratings (Stability, Momentum, Value, Sentiment, and Growth).
Stock #2: FedEx Corporation (FDX)
FDX is an international provider of transportation, e-commerce, and business services. The company operates in segments like FedEx Express; FedEx Ground; FedEx Freight; and FedEx Services. It offers express transportation, small-package ground delivery, freight transportation services, and time-critical transportation services.
On February 14, 2025, FDX declared a quarterly cash dividend of $1.38 per share on its common stock, in line with the company’s continued focus on delivering stockholder value. The dividend will be paid on April 1, 2025, to stockholders of record at the close of business on March 10, 2025.
FDX pays an annual dividend of $5.52, which translates to a yield of 2.14% at the current share price. Its four-year average dividend yield is 1.68%. Moreover, the company’s dividend payouts have increased at a CAGR of 23% over the past three years. FedEx has raised its dividends for four consecutive years.
On February 5, 2024, FDX announced the acquisition of RouteSmart Technologies, a global leader in route optimization solutions. The strategic acquisition further enhances FDX's efficiency across its international operations with the combination of RouteSmart’s leading technology solutions with FedEx’s unparalleled physical and data networks.
FDX reported a total revenue of $21.97 billion during the second quarter that ended November 30, 2024. Its non-GAAP operating income for the same period rose 13.1% from the year-ago value to $1.26 billion. The company’s non-GAAP net income was $990 million, while its non-GAAP EPS was $4.05, reflecting growth of 1.5% from the prior year’s quarter.
In addition, FDX’s cash and cash equivalents and total assets stood at $5.03 billion and $85.48 billion as of November 30, 2024.
Street expects FDX’s revenue for the third quarter (ending February 2025) to increase 1% year-over-year to $21.96 billion. Likewise, the company’s EPS for the same quarter is expected to grow 22.3% year-over-year to $4.72. Moreover, it has surpassed the consensus EPS estimates in three of the trailing four quarters.
FDX’s shares have gained 7.1% over the past year to close the last trading session at $258.54.
FDX’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Quality. Within the same industry, FDX is ranked #2 of 16 stocks.
In addition to the POWR Ratings we’ve stated above, we also have FDX ratings for Growth, Sentiment, Momentum, Value, and Stability. Get all FDX ratings here.
Stock #1: Radiant Logistics, Inc. (RLGT)
RLGT is a third-party logistics company that provides technology-enabled global transportation and value-added logistics solutions. The company provides domestic, international air, and ocean freight forwarding services, and freight brokerage services.
On December 3, 2024, RLGT acquired the assets and operations of TCB Transportation Associates, LLC, a privately held intermodal marketing company. RLGT acquired TCB through its wholly-owned subsidiary Radiant Road and Rail, Inc. The acquisition will accelerate RLGT’s bi-modal brokerage platform growth.
On October 2, 2024, RLGT acquired the operations of Focus Logistics, Inc., a Michigan-based, privately held company with operations in Romulus, Michigan. The strategic acquisition aligned well with the company's operations extended its capabilities, and will result in enhanced future operations.
During the second quarter that ended December 31, 2024, RLGT’s revenues increased 31.6% year-over-year to $264.54 million. Its adjusted gross profit grew 2.1% from the prior year’s quarter to $63.31 million. The company’s adjusted EBITDA increased 55.9% from the year-ago value to $12.02 million.
In addition, the company’s adjusted net income amounted to $10.69 million or $0.22 per common share, up 94.6% and 100% over the prior year period, respectively.
Street expects RLGT’s revenue and EPS for the first quarter (ending September 2025) to increase 15.4% and 25% year-over-year to $235 million and $0.20, respectively. Further, the company has an impressive earnings surprise history as it has topped consensus EPS estimates in three of the trailing four quarters.
Shares of RLGT have surged 8.8% over the past six months and 20% over the past year to close the last trading session at $6.78.
RLGT’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
RLGT’s stock has a B grade for Sentiment, Growth, Value, and Quality. The stock has topped among the 16 stocks in the Air Freight & Shipping Services industry.
Click here to access additional RLGT ratings for Momentum and Stability.
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UPS shares were trading at $118.85 per share on Friday afternoon, up $1.22 (+1.04%). Year-to-date, UPS has declined -4.40%, versus a 0.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Logistics Stocks Capitalizing on Supply Chain Disruptions StockNews.com
