Boeing (BA) Stock Analysis

by | Dividend Stock Analysis

B-737 900ER at Boeing's centennial celebrations.

Boeing Dividend

The Boeing dividend had been paid continuously since 1937 until it was suspended on 3/23/20. The latest dividend of $2.055 was paid on 3/06/20.

The dividend is currently SUSPENDED.

A great amount of damage has been done to the Boeing balance sheet. I will most likely take MANY years to repair the damage and allow the company to return to its former glory days.

 

Boeing (BA) Intrinsic Value – Margin of Safety Analysis            

(updated September 2021)

Normalized Diluted Earnings Per Share (TTM): $ -15.49
Cash Flow From Operations (CFO) Per Share (TTM): $ -21.90
Free Cash Flow Per Share (TTM): $ -23.69

Estimated Intrinsic Value: $169

Target Buy Price Based on Required Margin of Safety =  $121
(Required Margin of Safety Based On Risk Stability Grade:

A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)

Target SELL Price Based on Estimated Intrinsic Value = $177
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 20%, B = 15%, C = 10%, D = 5%, F = 0%)

 

 

Risk / Stability Grade:  D

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

 

Financial Risk  Grade:  D

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

 

Earnings Quality Grade: F

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report: 6/30/21

Boeing 787
Boeing Assembly
Boeing 747
Boeing 787 Dreamliner

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AAAMP Portfolios Position Disclosures:
Dividend Growth & Income – None
Treasure Trove Twelve – None
Global Dividend Balanced – None
Global Value – None
Global Value Aggressive – None
High Yield – None

Special Circumstances:

The grounding of the 737 MAX aircraft has hurt Boeing’s long term reputation.  As if that weren’t enough the global pandemic completely changed the short & medium term outlook for the need of new commercial passenger planes. Even with the vaccine it is unclear how fast passenger traffic and new plane orders will return to it former levels. It will take YEARS to repair the damage done to the Boeing balance sheet.

Company Description

Sector: Industrials
Industry: Aerospace & Defense

Boeing is the world’s largest aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital.

Boeing’s commercial airplanes segment produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards.

Boeing’s defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively.

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. The company’s global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit.

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Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.