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3 Companies With Better Dividends Than Boeing

GE Dividend Chart
GE Dividend Chart

GE Dividend data by YCharts .

As the above chart illustrates, GE still has a long way to go before its dividend payment reaches pre-crisis highs, but management has made increasing its dividend in line with its future earnings growth a top priority. According to CEO Jeff Immelt on the company's fourth-quarter earnings call, "our priority is to execute on [the] Alstom [acquisition], fund organic growth, and continue to grow the dividend."

Considering GE has been taking measures to reduce its reliance on its financial services business, GE Capital, to account for only 25% of its total earnings by 2016, the key to future dividend increases lies within management's ability to drive earnings growth from its industrial segment. Fortunately, GE's industrial segment outperformed GE Capital by a wide margin in 2014, reporting annual revenue growth of 7% to $108 billion, which translated to $17.8 billion in operating profit -- a 10% year-over-year increase.

Looking ahead, GE's industrial business remains well positioned to capitalize on major global growth trends, not to mention the added bump from the Alstom acquisition, which the company estimates will increase industrial revenues by $10 billion, raise operating income by $600 million, and create $1 billion in cost savings by 2016.

All told, with its dividend yield north of 3.6% and a P/E that's 19% lower than Boeing's, I think GE shares offer a more attractive value for long-term dividend investors.

Rich Smith : Flying is safer than driving, but Ford is safer than Boeing. At 2.4%, Boeing's dividend beats the average dividend yield on the S&P 500 by better than 20 basis points. But investors can still do better. Ford's stock, for example, pays its shareholders a whopping 3.7%, which is 71% better than the average, and 54% more than what Boeing shells out.

What's more, with Ford shares selling for just 8.8 times forward earnings, the stock itself is cheaper than Boeing's, at 16.7 times forward earnings. Ford's price-to-sales and price-to-book value ratios similarly offer discounts to Boeing stock . So Ford gives you a double whammy of profit goodness -- more money in the mailbox every month, plus a cheaper stock that's less "risky" to own than Boeing's. In this sense at least, "driving" is actually safer than "flying."

Those are the strictly financial arguments in favor of buying Ford stock over Boeing stock. But honestly, I get at least as much satisfaction from this emotional factor: When I buy something from a company I own, I get part of my purchase price back in cold, hard dividend cash. That's like a free discount on my purchase, every quarter, when I buy and drive a Ford F-150. And that's something I just can't get from Boeing stock.

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The article 3 Companies With Better Dividends Than Boeing originally appeared on Fool.com.

Asit Sharma , Rich Smith , and Steve Heller have no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford and General Electric Company. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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


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

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