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MisterValuation Stock of the Week: Boeing Company (BA)

2016-02-26

MisterValuation Stock of the Week: Boeing Company (BA)

Introduction

The MisterValuation dividend growth stock of the week is Boeing.  Hopefully the stock needs no introduction to most of you.  Nevertheless, the following short business description courtesy of S&P Capital IQ should provide deeper insights into the company’s businesses.

“The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide.

The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for various passenger and cargo requirements, as well as provides related support services to the commercial airline industry. This segment also offers aviation services support, aircraft modifications, spare parts, training, maintenance documents, and technical advice to commercial and government customers.

The Boeing Military Aircraft segment is involved in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems for the global strike, vertical lift, and autonomous systems, as well as mobility, surveillance, and engagement.

The Network & Space Systems segment engages in the research, development, production, and modification of electronics and information solutions; strategic missile and defense systems; space and intelligence systems; and space exploration products.

The Global Services and Support segment offers integrated logistics, including supply chain management and engineering support; maintenance, modification, and upgrades for aircraft; and training systems and government services, such as pilot and maintenance training.

The Boeing Capital segment facilitates, arranges, structures, and provides financing solutions, such as equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease, and investments.

The Boeing Company was founded in 1916 and is based in Chicago, Illinois.”

Boeing Has Come In To Fair Value

There are two primary reasons why I chose Boeing as my stock of the week. First was the fact that it has recently fallen into fair value territory after being overvalued for most of 2013, 2014 and 2015.  When reviewing Boeing on F.A.S.T. Graphs™ note that this A rated blue-chip dividend growth stock has quickly moved off of fair valuation very quickly in recent history.  Consequently, it’s possible this is also a decent candidate for some short-term gains.

Second, at today’s valuation I really like the current yield in excess of 3 ½%.  Although Boeing is not a Dividend Aristocrat, its historical earnings growth rate has been above average.  Moreover, during our last two recessions (2001 and 2008) the company did freeze their dividend, but they did not cut it.  Therefore, I do think the company offers stable dividend income with the potential for long-term growth and income.

The associated analyze-out-loud video will present my perspectives on Boeing.

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