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Growth and Value? Boeing Fits the Bill
03/03/2016 8:00 am EST
Winning stocks in 2016 are likely those that will be able to beat expectations, provide a solid yield, and participate in sectors with observable growth opportunities, asserts Chuck Carlson, editor of DRIP Investor.
Boeing (BA), the world’s largest aerospace company, fits the bill on every account. Earnings should remain healthy in 2016 and the yield of 3.5% provides a nice kicker to capital-gains potential.
Plus, with the world seemingly becoming a scarier place due to terrorist activities, wars, and conflicts all over the globe, Boeing’s defense business offers a play on growth in defense spending.
Its defense business includes satellites, AH-64 Apache helicopter, EA-18G electronic attack aircraft, KC-46 aerial refueling aircraft, and the Phantom Eye unmanned aircraft system.
The stock has pulled back some 22% from its 52-week high and offers an attractive value at current prices.
Results have been boosted in part by steady demand for commercial airplanes. For 2016, the consensus earnings estimate is $9.42 per share, which represents double-digit growth over 2015 results.
The stock currently trades at 13 times that earnings estimate, a reasonable valuation for a company showing good growth and strong backlog.
With an Overall Quadrix score of 88 and Quadrix Momentum and Value scores of 76 and 74 (all scores out of a possible 100), Boeing offers a solid growth-value combo play.
And the hefty yield means investors don’t have to depend solely on capital gains to generate decent returns.
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