Expeditors International

Methodology

Expeditors' freight forwarding and logistics business shows significant earnings cyclicality tied to global trade volumes, freight rates, and shipping capacity dynamics. The asset-light model provides high returns but amplifies volume sensitivity. Fair value calculations require normalizing for freight rate cycles and accounting for mid-single-digit long-term growth from market share gains.

Methodology

Expeditors typically trades at PEG ratios between 1.5-3.0x depending on freight cycle positioning and concerns about margin compression during weak demand environments. The company's customer relationships and operational execution support premium valuations to asset-heavy logistics peers. PEG varies widely with freight cycles, making it challenging to interpret during cyclical extremes.

Methodology

Expeditors pays substantial dividends with special distributions during strong freight environments, yielding 2-4% depending on profitability, making PEGY more attractive than PEG. The company returns excess cash through dividends rather than capital expenditures. Total shareholder yield increases significantly during freight upcycles when special dividends supplement the base payout.