Shares Take Flight As Boeing Boosts Dividend Payout


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Dividend seekers don't usually expect to land a highflier when buying an income stock. ButBoeing ( BA ) shareholders are getting that rare combination -- at least this year.

Despite problems with its 787 Dreamliner, federal budget uncertainties and recent labor union woes, the jet maker has boosted its dividend and seen its share price take off.

Its 777X wide-body plane was a big hit last month at the Dubai Airshow, where Middle Eastern carriers placed a flurry of orders for the long-haul aircraft. And last week, China's Cathay Pacific Airways ordered 21 of the jets.

Where the 777X will be built is still in question. Washington state union workers vote Jan. 3 on the latest contract offer Boeing has made to keep production there.

The Chicago-based company last week hiked its quarterly dividend payout by 50% to 73 cents a share. That works out to an annual payout of $2.92, for an annualized yield of 2.1%, slightly higher than the S&P 500.

Boeing has paid out a dividend for 71 years now. It started with an annual payout in 1942 before switching to quarterly payments in 1954. Since then, the dividend has trended mostly higher, though it held steady at 42 cents a share from 2009 to 2011.

The company reported low-double-digit profit growth the past three quarters after two quarters of declining earnings. Analysts expect a 20% jump in EPS in Q4.

Its three-year Earnings Stability Factor of 5 on a 0-to-99 scale indicates steady growth, though its five-year factor of 50 includes a big drop in 2009 profit.

Solid overall fundamentals and a surging stock performance help Boeing earn a 94 Composite Rating. Shares have soared 82% this year, outpacing the S&P 500's 29% gain.

Boeing also boosted its stock buyback program by $10 billion, which is in addition to the $800 million authorized in its current repurchase plan. It expects to buy back shares over the next two to three years.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas

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