With $88.4 billion in annual sales,
is easily the biggest plane maker on the planet, outselling
by nearly 10%. But is bigger better?
Today we're going to take a quick look at Boeing not from the
perspective of whether it's a successful business (which it
clearly is). Instead, we'll be asking whether
is likely to turn into a successful investment for small
investors like you and me.
In short, is Boeing stock one you can ride to riches? Let's
step into the cockpit and see.
Peering into the cockpit of the Boeing 777. Photo: Boeing
They like you! They really like you, Boeing!
There are a lot of good reasons to think that Boeing stock will
remain popular with -- and reward -- investors over the long
term. Reason No. 1: The fact that Boeing
are so popular with fliers. Last year, flyer information website
released a survey of 1,000 frequent fliers, asking them
which planes, out of all the planes built by all the
manufacturers in the world, they most enjoy flying on. The result
by a nautical mile
According to Airfarewatchdog, nearly three in four respondents
polled said they'd rather travel with Boeing than in competing
models from Boeing rivals Airbus or
. Indeed, out of the top seven planes ranked by fliers, six
of them were Boeings. Here they are in order:
- Boeing 777 (in first place)
- Boeing 747 (in second)
- The Boeing 787 Dreamliner (skipping a beat to land at
- And followed in quick succession by the Boeing 737, 767,
and 757, in that order
Boasting a product catalog that includes both the world's
"fastest selling" airplane in history (the 787) and also its
"best selling" airplane over time (the 737), it's no wonder that
Boeing got some planes on Airfarewatchdog's list. But six out of
the top seven?
That doesn't happen by accident. And it bodes well for
Boeing's continued success in the future.
Boeing is winning the orders race, and the deliveries
As long-term investors, we like to invest in companies that
succeed over the long term. And Boeing, whose roots stretch back
nearly a century to its founding in 1916 (let's give a nod here
for supplying the date), has been a star of the aerospace and
defense industry for a very long time. But there's also good
reason to expect Boeing stock to succeed in the short and medium
term as well -- time frames more relevant to today's
How do we know this? Because every month, Boeing and Airbus
provide investors with near real-time updates on how their
businesses are going -- and at last report, Boeing was winning.
The most recent data
show that when Boeing is beating Airbus on both new orders
received this year, and deliveries of aircraft ordered in years
past. Through the end of July, Boeing added 783 net new orders
(that's "gross" orders minus cancellations) to its order book for
2014, versus only 705 net new orders for Airbus, eclipsing its
rival by 11%. Boeing has also delivered 400 planes to its
customers so far this year -- 14% more than Airbus can boast.
Think that number might mean that Boeing is running out of
airplanes to build?
Far from it. In fact, according to Boeing's July
filing with the SEC
, the company still has more than 5,200 airplanes on order at its
Commercial Aircraft division. That's $377 billion worth of
business "in the bag." And it's not even counting backlog at the
company's other divisions. Add them all up, and total backlog at
the company is valued at $440 billion, or about five years' worth
of work at Boeing's current annual revenue rate.
Boeing busted the union
Perhaps the best reason to think Boeing will prosper in the years
to come, though, is also the least politically correct:
Boeing busted the union
Late last year, in a Machiavellian gambit playing on worker
fears that Boeing might shift "777X" airliner production away
from Seattle, Boeing presented its International Association of
Machinists and Aerospace Workers union with an ultimatum: Either
sign on to a new 10-year contract that first freezes, then
eliminates, worker defined benefit pensions (and holds wage hikes
to about one half of one percent per year through 2024) -- or
Boeing would take its business elsewhere.
the union blinked
, voting to ensure Boeing would keep their jobs in Seattle, and
accepting the benefits cuts and meager wage increases as
For Boeing shareholders, though, this vote was an unalloyed
good. For the next 10 years, Boeing has a firm grip on the rate
at which its costs will rise, and can operate free from fears
that its union might call a strike (such as the one that
derailed Dreamliner production in 2008
). As Boeing Commercial Airplanes President and CEO Ray Conner
said at the time: "Thanks to this vote by our employees, the
future of Boeing in the Puget Sound region has never looked
Boeing shareholders probably couldn't agree more.
And one more thing...
Did we mention that Boeing also pays is shareholders a tidy
2.2% dividend yield. That's key because, as smart investors
simply crush their non-dividend paying counterparts over the
long term. Smart investors also know that a well-constructed
dividend portfolio creates wealth steadily, while still
allowing you to sleep like a baby. Knowing how valuable such a
portfolio might be, our top analysts put together a
report on a group of high-yielding stocks
that should be in any income investor's portfolio. To see
our free report on these stocks, just
click here now
Introducing the 777X -- in many ways, the future of Boeing.
3 Reasons The Boeing Company's Stock Could
originally appeared on Fool.com.
has no position in any stocks mentioned. The Motley Fool
recommends Embraer-Empresa Brasileira. Try any of our Foolish
free for 30 days
. We Fools may not all hold the same opinions, but we all believe
considering a diverse range of insights
makes us better investors. The Motley Fool has a
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a