{"id":66340,"date":"2015-01-12T05:01:51","date_gmt":"2015-01-12T10:01:51","guid":{"rendered":"http:\/\/countingpips.com\/?p=66340"},"modified":"2015-01-12T07:38:44","modified_gmt":"2015-01-12T12:38:44","slug":"boeing-is-poised-to-outperform-in-2015","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/01\/boeing-is-poised-to-outperform-in-2015\/","title":{"rendered":"Boeing Is Poised to Outperform in 2015"},"content":{"rendered":"
January 12, 2015<\/div>
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By WallStreetDaily.com<\/span><\/a> \"$490-Billion<\/p>\n

By Chris Worthington<\/a>, Editor-in-Chief of Income<\/em><\/p>\n

Recently, some warning signs have popped up in the market.<\/p>\n

One red flag is the level of total margin debt as a percentage of GDP, which has reached its highest point since 1929. In fact, the current level is higher than in both 2000 and 2007 \u2013 which means 2015 could potentially see a dramatic downturn in stocks.<\/p>\n

Investors, therefore, would be thrilled to find a rock-solid opportunity in this environment \u2013 and if it happened to be rapidly growing its dividend, well, that would be even better.<\/p>\n

With that in mind, I\u2019ve identified a company that income investors can hang their hats on in 2015\u2026<\/p>

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Clear Skies for This Planemaker<\/h2>\n

The firm in question is none other than Boeing<\/strong> (BA<\/a>), the world\u2019s largest aerospace company and the leading manufacturer of commercial jetliners and military aircraft combined. Now, this blue chip isn\u2019t exactly a hidden gem, but it is<\/em> positioned to have a very strong year.<\/p>\n

For starters, the 787 Dreamliner, which Boeing has been selling at a loss until now, should become cash-positive in 2015. And don\u2019t worry about sales dropping off anytime soon \u2013 Boeing has a backlog of 850 orders for the Dreamliner, which, at a rate of 12 per month, means the 787 is sold out until at least 2020.<\/p>\n

In fact, Boeing\u2019s sales growth is doubling the industry average, and it has an incredible $490-billion order backlog \u2013 the equivalent of five years\u2019 <\/em>worth of revenue at 2014 levels.<\/p>\n

Furthermore, Boeing just received funding to the tune of $4.2 billion from the Government Accountability Office, which the company will use to develop a new space capsule that can carry astronauts to the International Space Station.<\/p>\n

Boeing\u00a0Dividend Growth<\/h2>\n

For income investors, the best news is Boeing\u2019s dividend, which has increased by 88% over the past two years and by 192% over the past decade. In fact, the 25% dividend hike Boeing announced in December 2014 was the best in the aerospace and defense industry, other than Huntington Ingalls<\/a><\/strong> (HII<\/a>).<\/p>\n

That gives BA a dividend yield just shy of 3%, which is higher than the industry average and higher than the S&P 500, as well. Plus, in 2014, the company bought back 5% of its shares, boosting total yield<\/a> to about 8%.<\/p>\n

Boeing also implemented a $12-billion share repurchasing program in December that will be spread out over the next two to three years\u2026 meaning total yield should stay relatively high for the foreseeable future.<\/p>\n

If there\u2019s one concern, it would be Boeing\u2019s free cash flow multiple. However, the company has produced more than $3 billion in free cash over the past four quarters and is projecting more than $7 billion in operating cash flow for 2015. If we assume a slightly higher capital expenditure than 2014 ($2 billion), that means Boeing should have nearly $5 billion in free cash flow this year \u2013 which will help fund its share buybacks and allow for another dividend hike.<\/p>\n

Finally, BA\u2019s stock finished down 2.6% in 2014, while the Dow gained 8.4%. But that was mostly before the firm implemented its latest share repurchasing program and raised its dividend \u2013 which, in tandem, signal that Boeing has utmost confidence in the underlying business going forward.<\/p>\n

Thus, it appears shares are simply cheap right now, as evidenced by Boeing\u2019s EV\/EBITDA of 10.5x \u2013 which is lower than the median EV\/EBITDA of industrial stocks within the S&P 500 (11.1x).<\/p>\n

Bottom line: Based on its massive order backlog, rapid dividend growth, and relatively cheap valuation, Boeing appears to be a rock-solid choice for the coming year.<\/p>\n

Good investing,<\/p>\n

Chris Worthington<\/p>\n

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The post Boeing Is Poised to Outperform in 2015<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Chris Worthington, Editor-in-Chief of Income Recently, some warning signs have popped up in the market. One red flag is the level of total margin debt as a percentage of GDP, which has reached its highest point since 1929. In fact, the current level is higher than in both 2000 and 2007 \u2013 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-66340","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=66340"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66340\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=66340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=66340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=66340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}