Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



2 Reasons to Buy Boeing Stock Now

Boeing 737, courtesy of Boeing Media Center. 

Investors sitting on the sidelines of the current stock market rally likely find themselves cautious to put more money into the market – fearing that it's due for a pullback. Regardless of whether a pullback happens sooner rather than later, as a long-term investor, you would be better to put your investment money in companies with sustainable and profitable growth. Here are a couple recent events that emphasize two reasons Boeing (NYSE: BA  ) offers that type of growth potential.

Future growth looks promising
Over half of Boeing's revenue comes from its commercial aviation industry which continues to be a long-term-growth story. Boeing estimates that over the next 20 years the demand will hit 34,000 commercial airplanes – an increase estimated to be worth $4.5 trillion. This growth will be led by emerging markets' growing demand, as well as mature markets' replacing existing aircraft fleets. 

The upside of this emerging market growth is apparent in Boeing's recent press release. Boeing just finalized an order for seventy 737 commercial airplanes. The order was mixed between MAX 8s, MAX 9s, and Boeing's next-generation 737-800. The deal is valued at nearly $7 billion and is the largest Boeing order in Turkish Airlines' history. As emerging markets continue to develop, investors hope this will be a reoccurring press release. 

"We are delighted to finalize the order, which will considerably expand our fleet and contribute to our continued growth," said Temel Kotil, CEO of Turkish Airlines, in a Boeing press release. "Turkish Airlines is a global airline, serving the most countries worldwide and we are building the strongest network in the world. Our long-standing partnership with Boeing is one of the key factors behind the success of Turkish Airlines."

The latter part of Kotil's quote is most important to me. It's important for Boeing to keep long and healthy relationships with emerging markets as the world's fleet continues to grow – providing a sustainable customer base.

Juicing margins
Boeing also recently announced its 787 program was on track to achieve its goal of producing 10 per month by the end of this year – up significantly from the two planes per month in 2011. So far 50 of the 787s have been delivered, but that is significantly less than the 800 in remaining global orders.

Boeing executives are aiming to increase margins with increased production rates across multiple models. Each extra airplane produced per month will minimize overhead costs and become more profitable. Management also expects its 777 model to increase by one plane per month and its 737 to increase by four per month by mid-2014.

Bottom line
The most important thing when investing in a market that has reached record highs, is finding stocks that still have future sustainable and profitable growth. Boeing expects its orders to continue as demand for commercial aircraft increases. In addition, its consistent effort to produce more planes per month will have a substantial effect on Boeing's bottom-line profit. In the midst of government defense spending cuts, those two reasons could make Boeing stock a buy today – even as the market flirts with record-high levels. 

Even with those two reasons to buy, there are some important issues Boeing faces.
Emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best minds on industrials have collaborated to provide investors with the key, must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out – simply click here now to claim your copy today.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2432253, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:33:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,217.65 122.82 0.68%
S&P 500 2,158.08 11.98 0.56%
NASD 5,301.16 43.67 0.83%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 3:14 PM
BA $131.40 Up +0.83 +0.64%
Boeing CAPS Rating: ****