Boeing: Should You Buy The Best-Performing Defense Stock Now?

Summary

  • Boeing outperforms its peers and the market in multiple periods.
  • Boeing has a strong backlog of seven years-plus based on current production capacity.
  • Applications of new technologies throughout Boeing’s business will allow for margin expansion to the mid-teens by 2020 and further expansion beyond that.
  • The stock has been in consolidation mode year to date. So, it’s a good time to dig further into the company to see if it fits your portfolio.

Aerospace and defense stocks have finally taken a breather and are in consolidation. As I was reviewing a potential dividend-growth stock to buy from the group, I noticed that Boeing (NYSE:BA) has outperformed its peers, including Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD), and Raytheon (NYSE:RTN) and the market in different periods, including the year-to-date, one-year, three-year, five-year, and 10-year periods.

A Business Overview

Boeing is the world’s biggest aerospace company. It’s also the leading manufacturer of commercial airplanes and defense, space and security systems and a key provider of government and commercial aerospace services.

Boeing supports airlines and the U.S. and allied government customers in 150-plus countries. Last year, its global services segment made up about 15.6% of revenue. Year to date, this segment grew 11%, which will help stabilize its overall business performance as this business is non cyclical, unlike the commercial aerospace industry.

Solid business growth

Management expects healthy growth to continue in the overall aerospace and defense market. Over the next 20 years, it sees a strong demand for commercial airplanes. It also …

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Disclosure: At the time of writing, the author doesn’t own any stocks mentioned.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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