Dividend.com: FedEx Delivers

FedEx Cost Cuts Offset Global Slowdown

FedEx(FDX Quote - Cramer on FDX - Stock Picks) just posted first-quarter revenue results that rose 8% to $9.97 billion. The company's cost-cutting efforts were neutralized by the current economic weakness and fuel prices.

The company's total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 1% year over year for the quarter. The company will be will increasing shipping rates by an average of 6.9% for U.S. and U.S. export services, effective Jan. 5, 2009.

We have avoided shares of FedEx since our coverage began in early June. We actually prefer its competitor, United Parcel Service(UPS Quote - Cramer on UPS - Stock Picks), and its larger dividend. That said, we would like to see a larger dividend payout from FedEx to go along with more consistent growth. The company has a minuscule 0.45% dividend yield, based on last night's closing stock price of $88.07.

FedEx is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.3 out of 5 stars.

Kraft Foods Replaces AIG, Joining the Elite on the Dow 30

Kraft Foods(KFT Quote - Cramer on KFT - Stock Picks) will become the newest member of the Dow Jones Industrial Average on Sept. 22, replacing American International Group(AIG Quote - Cramer on AIG - Stock Picks).

There is no set qualifying criteria for adding stocks to the DJIA index, but companies on the list are usually leaders in their respective sectors. The announcement of this change should not be a surprise, considering AIG's takeover by the Federal Reserve via an $85 billion emergency bailout loan.

This is a more of a status upgrade for Kraft Foods than anything that can materially boost its stock price. We have been recommending Kraft shares since late July, when they were trading at the $29.38 level. The company has a 3.55% dividend yield, based on last night's closing stock price of $32.65.

Kraft Foods is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.5 out of 5 stars

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