Boeing Company (BA)
- 64.5 (USD)
(+1.7 %)
9/8/2010 4:00:00 PM
BA Stock Report
NYSE:
BA
64.5
(USD)
(1.7 %
)
09/08 4:00 PM
Open
63.6
Day's Range
63.58
-
65
52Wk Range
47.18 - 76.00
Mkt Cap
46.2 Billion
Vol/Avg
3737753/6.8 Million
Div/Yield
2.66%
Key Fundamentals
| Price (9/8/2010) | 64.5 |
|---|---|
| Volume (9/8/2010) | 3737753 |
| Last Close Price | 64.5 |
| 10 Day Average Volume | 6.8 Million |
| 13 Week Price Range | 59.84 - 69.34 |
| 52 Week Price Range | 47.18 - 76.00 |
| LTM Revenue | 65.4 Billion |
| Shares Outstanding (12/31/2009) | 731.7 Million |
| Market Capitalization | 46.2 Billion |
| Shares Held By Institutions | 51.2 Million |
| Institutional Holders | 1,151 |
| % Shares Held By Institutions | 76.31% |
| Earnings Per Share (EPS) | 1.86 |
| P/E Ratio | 44.0529 |
| Book Value Per Share | 4.2054 |
| Gross Margin | 17.95% |
| Annual Dividend | 1.68 |
| Dividend Yield | 2.66% |
| Beta | 1.29019 |
| Fiscal Year Ends | December |
About Boeing Company
Boeing Companyis considered to operate in the Industrial Materials sector. They specifically operate in the Aerospace & Defense - Major Diversified business segment contained within the Aerospace & Defense industry.
Boeing Company was originally incorporated in the State of Washington in 1916 and reincorporated in Delaware in 1934. It is engaged in the design, development, manufacture, sale and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services. It is a manufacturer of 100+ seat airplanes for the worldwide commercial airline industry and operates as a defense contractor in the U.S. The Company operates in five main segments: Commercial Airplanes; Boeing Military Aircraft, Network and Space Systems, Global Services and Support and Boeing Capital Corporation. The other segment classification mainly includes the activities of Engineering, Operations and Technology and certain intercompany items. The Commercial Airplanes segment is involved in developing, producing and marketing commercial jet aircraft and providing related support services, mainly to the commercial airline industry worldwide. The Company is a producer of commercial aircraft and offer a family of commercial jetliners designed to meet a spectrum of passenger and cargo requirements of domestic and non-U.S. airlines. This family of commercial jet aircraft currently includes the 737 Next-Generation narrow-body model and the 747, 767, 777 and 787 wide-body models. The Commercial Airplanes segment also offers aviation services support, aircraft modifications, spares, training, maintenance documents and technical advice to commercial and government customers worldwide. Boeing Military Aircraft segment is engaged in the research, development, production, and modification of military aircraft precision engagement and mobility products and services. Network and Space Systems segment is engaged in the research, development, production, and modification of products and services to assist its customers in transforming its operations through network integration, intelligence and surveillance systems, communications, architectures, and space exploration. Global Services and Support segment is engaged in the operations, maintenance, training, upgrades, and logistics support functions for military platforms and operations. It faces competition in all market segments, mainly from Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation. It deals with numerous U.S. government agencies and entities, including but not limited to all of the branches of the U.S. military, NASA, and the Department of Homeland Security. In the United States, its commercial aircraft products are required to comply with Federal Aviation Administration regulations governing production and quality systems, airworthiness and installation approvals, repair procedures and continuing operational safety. The raw materials required for its aerospace are aluminum, sheet, plate, forgings and extrusions, titanium, sheet, plate, forgings and extrusions and composites including carbon and boron. The Company's operations are subject to federal, state, local and non-U.S. environmental laws and regulations relating to the discharge, treatment, storage, disposal, investigation and remediation of certain materials, substances and wastes.
Ockham's Rating/Recommendation Summary
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BA Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at BA through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.04x and 0.62x respectively.
Utilizing this range we can see that BA’s current Price to Sales per share ratio of 0.71x is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that BA does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
BA Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. BA is significantly above its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from BA. For example, BA's Cash Earnings ratio per share has fluctuated between 16.77 and 28.84 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where BA is with respect to prior business periods.
So what does this tell us about BA in particular? Basically, we would value the current level of Cash Earnings per share (which is at 44.92) as significantly overvalued. Just by looking at the last closing price of BA, which was 63.30, we can see that compared to the historical high Price to Cash Earnings levels we calculated, the market has already rewarded BA with a higher stock price. So basically, we don't view this level of Cash Earnings or stock price as compatible with a long term value at this point. Just remember, that does not mean that BA may not have other merits with which to find a good investment opportunity, it just means that we would prefer to see either an increase in Cash Earnings or a decrease in stock price before we would become bullish on this metric.
BA Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.
In BA’s case, the estimated annual dividend is 1.68 resulting in a current dividend yield of 2.65%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from BA against the historic high and low levels over the past 10 years. The highest dividend yield from BA over this period was 5.78% while the lowest dividend yield was 0.97% While it is quite common for a growth stock to pay no dividend at all, but for a mature company such as BA that has a history of paying dividends it is disappointing to see their dividend yield drop so significantly. At this time, the current dividend yield is 21.44% below the median yield.