The aerospace behemoth
The Boeing Co.
) boosted its quarterly dividend by more than 50% and authorized
a $10 billion share repurchase plan, the biggest in its history.
Boeing's shares edged up 0.7% to $134.72 yesterday before the
announcement. The shares rallied further in after-hours trading.
The quarterly dividend will increase to 73 cents a share
(annualized $2.92 per share) from 48.5 cents (annualized $1.94)
and will be payable on Mar 7 to shareholders of record as of Feb
14. Boeing's new dividend will yield 2.17% based on the shares'
closing price. The company had last announced a dividend at the
end of October.
The recent share buyback authorization comes in addition to the
$800 million already pending from a 2007 program. In 2009, Boeing
suspended its share buyback program as it was grappling with
production delays and cost overruns for the 787 Dreamliner.
Boeing, with a robust backlog and growing deliveries, raised its
full-year 2013 earnings guidance given the strength in its
broader commercial aircraft business. Commercial Airplanes' 2013
deliveries are expected to be between 635 and 645 airplanes.
Sequestration and budget cuts notwithstanding, its defense
segment also maintained a solid performance and fetched $7
billion in fresh new orders during the last reported quarter.
Boeing's defense business stands out among its peers by virtue of
its broadly diversified programs, strong order bookings and order
backlog. Total backlog increased sequentially from $410.3 billion
to $415.1 billion on $27 billion of net new orders during the
The world's largest aircraft manufacturer, Boeing recently
received a sizeable order from the Pentagon, following a big win
of $6.5 billion from Air Canada for its commercial unit. These
contracts imply that the aerospace behemoth is prudent enough to
not only maintain its foothold in the commercial space, but also
remain proactive in the defense arena despite budget austerities.
The company was however confronted with multiple issues related
to its high-tech 787 Dreamliner aircraft, which many believe is
the future for the company. However, the company has powered
through this weakness, suggesting that these recent problems
shouldn't be much of a concern to investors. The stock has gained
78.3% so far this year in spite of several setbacks.
Boeing's contract wins - domestic and international - in both
defense and commercial airplanes businesses will ensure a steady
performance in the future.
Boeing currently carries a Zacks Rank #2 (Buy). Apart from
Boeing, some well-placed stocks in the same sector include
Lockheed Martin Corp.
Huntington Ingalls Industries, Inc.
). While Raytheon sports a Zacks Rank #1 (Strong Buy), Lockheed
and Huntington presently hold a Zacks Rank #2 (Buy).
BOEING CO (BA): Free Stock Analysis Report
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RAYTHEON CO (RTN): Free Stock Analysis Report
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