Dow Jones Industrial Average is arguably the most important measure of U.S. equity prices. This is evident from a simple stat whereby everyday almost five times the number of Americans search for “Dow Jones” in Google compared with “S&P”. And when it comes to weightings, Apple Inc. (AAPL - Free Report) (4.5%) and Microsoft Corporation (MSFT - Free Report) (2.8%) easily falls short of The Boeing Company (BA - Free Report) (10.9%). Notably, Amazon.com, Inc. (AMZN - Free Report) and Alphabet Inc. (GOOGL - Free Report) isn’t listed in the Dow, which is a price weighted index.
So, logically Boeing is the most important blue chip stock and the biggest Dow component. Further, it is the best performing Dow stock this year by a wide margin. Thanks to its 10.9% weighting, Boeing had contributed more than 700 points to the Dow so far this year. Meanwhile, the next four big names including Goldman Sachs, IBM, United Technologies and Home Depot contributed only 225, 177, 157 and 133 points, respectively.
Boeing’s Shares Northbound
Going forward, Boeing’s shares are widely expected to rise as the firm frequently tops the list of government contractors. Additionally, the Trump administration’s interest to rebuild the U.S. military by bumping up Pentagon’s budget should certainly bode well for the company. Boeing’s expected earnings growth for the current year is 25.7%, way more than the Aerospace - Defense industry’s gain of 3.8%.
Further, Boeing has a market value of $230 billion and annual revenues worth of $100 billion. With claims of an order worth $500 billion, the company has secured its position in the near term.
Lest we forget that Boeing’s sales rose 8% to $101 billion last year and earnings per share increased a whopping 30%.
Boeing Continues to Enhance Shareholders Worth
Boeing has always improved shareholders wealth through dividend payments and share buybacks. The company has consistently paid quarterly dividends for the last eight decades and been increasing its dividend payout once every four quarters for the last seven years. In fact, Boeing’s quarterly dividends soared 389% in the last seven years.
(Source: Boeing’s Press Release)
In fact, the manufacturer of commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems paid out $3.95 billion in dividends last year, almost triple the $1.26 billion it spent in 2011.
At the same time, Boeing initiated its first share buyback program in 2013. Since then, Boeing has repurchased $41 billion worth of its own shares.
Boeing: A Top Ranked Stock
Given the aforesaid positives, Boeing flaunts a Zacks Rank #1 (Strong Buy). In the past 60 days, nine earnings estimates moved north for the next year, while none moved in the opposite direction. The Zacks Consensus Estimate for earnings rose 11.3% in the same period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boeing flaunts a Growth Score of B and has outperformed the broader industry on a year-to-date basis (+29.5% vs +22.8%).
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