Boeing (BA) Stock Analysis
The Boeing dividend has been paid continuously since 1937 and increased significantly the past 5 consecutive years. BA is included in the Arbor Dividend Growers / Producers list. Boeing held the dividend steady but not increasing it during the great recession.
Current Dividend: $5.68
Dividend Yield: 2.2%
Cash Dividend Payout Ratio: 28%
Market Capitalization: 154 B
Enterprise Value: 155 B
Industry: Aerospace & Defense
Boeing (BA) is the largest aerospace company in the world, exhibited by over 10,000 commercial jetliners (approx. 70% of revenue) currently in service and being a major player in the defense, space, and security industry (approx. 30% of revenue). The company is the single largest exporter from the United States.
It’s commercial jets and defense, space, and security systems are sold to more than 150 countries (approx. 60% of revenues). Military aircraft and weapons systems account for approximately 20% of total revenues from the U.S. Department of Defense.
Boeing offers facilities and networks 24 hours a day throughout the globe. Support services are broad and deep; including pilot training, spare parts, onsite technical assistance, engineering, software solutions, and financing for Boeing products.
Dividend Analyzer Checklist
(updated September 2017)
Dividend Safety Score (26/33 points)
Dividend Per Share (ttm): $5.02
Dividend Payout Ratio (ttm): 57%
Cash Dividend Payout Ratio (ttm): 32%
Cash From Operations (CFO) Per Share (ttm): $17.97
CFO Dividend Coverage (CFO / DPS): 3.6 (4/6 points)
Free Cash Flow (FCF) Per Share (ttm): $14.27
FCF Dividend Coverage (FCF / DPS): 2.8 (5/6 points)
Net Financial Debt: $1594 M
Total Assets: $89673 M
Net Financial Debt / Total Assets: 2% (10/12 points)
Net Financial Debt to EBITDA (ttm): 132%
Total Liabilities to Assets Ratio (Qtr.): 100%
Piotroski Score (1-9) (TTM): (7/9 points)
Profitability & Growth Score (13/33 points)
Revenue (10 Year Growth) *CAGR > 4.14%: 4.4% (4/4 points)
EPS Basic Cont. Operations (10 Year Growth) CAGR > 4.14%: 10.3% (4/4 points)
Cash From Operations (10 Year Growth) CAGR > 4.14%: 3.4% (0/6 points)
Operating Earnings Yield (ttm): 6.0% (2/7 points)
Net Income (ttm): $5127 M
Gross Profit (ttm): $13958 M
Total Assets: $89673 M
Gross Profitability Ratio = GP / Total Assets: 16% (3/12 points)
Cash Return On Invested Capital (CROIC)(tttm): 75%
Return on Invested Capital (ROIC): 43%
Return on Invested Capital (ROIC) (5 Year Median): 25%
Return on Invested Capital (ROIC) (10 Year Median): 24%
Valuation Score (16/34 points)
Free Cash Flow Yield (ttm): 7.2% (8/9 points)
EV to EBIT (ttm): 15.8 (4/9 points)
EV to EBITDA (ttm): 13.0 (4/9 points)
PE10: 44.7 (0/7 points)
Price to Sales Ratio (ttm): 1.6
Price to Book Value (ttm): 1475
Price to Earnings Ratio (P/E) (ttm): 29.1
TOTAL POINTS – (55/100) (50 is an average score)
*Compound Annual Growth Rate (CAGR)
**A Compound Annual Growth Rate of 4.14% = a 50% gain over 10 years.
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Boeing currently enjoys the benefits of a backlog of approximately 5,700 aircraft orders. Replacement demand from the U.S. and Europe along with new demand from emerging markets is providing above average growth for an industry dominated by just two companies: Boeing and Airbus.
The duopoly provides significant competitive advantages. Customers expect to pay for support and service for about 20 years after their purchase of an aircraft. Switching costs are significant (pilot, crew, and maintenance training, spare parts, etc.), causing customers to be loyal to a single company when their needs are met.
The defense, space, and security segment of Boeing has faced restrained government spending and lost ground to competitors for large new programs; although ramped up defense spending under the Trump administration and new orders from the Middle East may mitigate some of this weakness.
While Boeing enjoys its dominant position in Commercial Aircraft, any surprise positive developments in the defense sector could provide an unexpected improvement in outlook. It’s possible the defense cycle could be turning as countries begin to realize the world is a dangerous place and current spending restraint may be hurting the ability to restrain or defeat rising threats.
The long term health of the industry heavily depends on the economy and the willingness of populations to fly. Air travel demand can be affected by economic downturns, terrorism, and other geopolitical threats.
(updated September 2017)
Boeing (BA) is ranked #97 (out of 342) overall and #18 (out of 71) in the Industrials Sector by the Dividend Analyzer.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Can Be Considered
Looking For Exposure to Industrials Sector / Can Be Considered
Deep Value Investors / Watchlist
Portfolio Position Disclosures:
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DVB Dividend Growth Portfolio: None
DVB High Income Portfolio: None
Arbor Asset Allocation Model Portfolio (AAAMP): None
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