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Invest in Boeing – Dreamliner Revisited

In 2011 we suggested that it might be time to invest in Boeing, BA. The fundamental analysis of the Dreamliner was compelling although that was before the battery problems. Now, again it appears to be time to invest in Boeing as the company expects to beat its previous record for most planes delivered in a year. And, the news about battery problems and fires in the Dreamliner has been very quiet.

Invest in Boeing: Three Years of Stats

Boeing currently sells for $130 a share. That is after a gap up after the company reported better than expected cash flow based on a lot of plane deliveries. Back in 2011 when we suggested that investors look at this stock as an exercise in fundamental analysis of big cap stocks poised for a run up in price. Back then Boeing was selling for $60 to $80 a share. The share price started to go up in 2013 and the stock now trades in the $130 to $140 range. Boeing pays a seventy-three cent per share dividend which at the current share price comes to a two and a forth percent yield. Earnings per share are just under six dollars. But, if you want to invest in Boeing now you will want to know the intrinsic value of the stock.

Invest in Boeing for Forward Looking Dreamliner Earnings

This brings us back to our 2011 argument for why you might want to invest in Boeing. The aerospace giant delivered the first Dreamliner to All Nippon Airways at a ceremony at the Boeing Everett Plant in the state of Washington on September 26, 2011. The delivery of the first aircraft is three years behind schedule. Half of the structure of the 787 is carbon composite materials reducing the plane’s weight and resulting in a twenty percent reduction in fuel consumption compared to jets in its class. This will allow the 787 to fly longer routes. The Boeing 787 takes advantage of a lot of new technologies including new lithium batteries that caused fires and the grounding of the entire fleet of Dreamliners for part of 2013. The plane is more comfortable than other jets with features like larger windows and storage space for carry-ons. The new jet goes for around two hundred million each depending upon design variations. Two hundred million times eight hundred orders at the time of our first article comes to roughly one hundred and sixty billion US Dollars. Today Boeing has delivered 132 of these jets and has orders for a thousand more. This means that Boeing can expect cash flow just from the Dreamliner of two hundred billion dollars in the next few years.

Other Boeing Operations

Boeing does not limit itself to making high tech airplanes. The company makes and launches satellites to orbit the earth. Visit this link to see a current Boeing Satellite launch schedule. Combined aerospace operations make Boeing the largest US exporter by dollar value. All of US agriculture runs a forty-five billion dollar trade excess. Boeing runs a trade excess of more than fifty billion each year! The company is unique in an extremely high cost of entry set of markets and as such is likely to grow and thrive over the years to come.

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