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How Boeing’s Forward Dividend Yield Compares with Its Peers

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Boeing’s dividend yield

With a closing price of $331.30 on June 26, Boeing (BA) has a forward dividend yield of 2%. Over the past year, the aircraft manufacturer’s yield has declined, reflecting a downward trend due to the strong appreciation of its stock.

Its dividend yield has fallen from 3.7% at the start of 2016 to 3.3% at the beginning of 2017. From that level, the dividend yield declined to 2.1% in the fourth quarter of 2017. Its dividend yield is far below the 2.6% average dividend yield of the Dow Jones Industrial Average (DJI).

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Peer group’s forward dividend yield

Now let’s look at the forward dividend yield of the aerospace and defense sector’s major companies, starting with Lockheed Martin (LMT). It has the highest yield of 2.7% among the peers we’re looking at. United Technologies (UTX), a US high-end industrial technology solutions provider, ranks after Lockheed with a metric of 2.3%. Boeing ranks third in terms of forward dividend yield.

General Dynamics (GD) has a yield of 1.9%. It’s followed by Raytheon (RTN) with a metric of 1.7%. Northrop Grumman (NOC) and Embraer (ERJ) have forward dividend yields of 1.5% and 1.1%, respectively. The SPDR Dow Jones Industrial Average ETF (DIA) has a 9.5% weight in Boeing and a ~13% exposure to aerospace and defense companies overall.

Boeing’s cash dividend coverage

A company’s cash dividend coverage ratio measures its dividend paying ability. This metric is calculated as income before extraordinary items minus minority and preferred dividends over dividends paid. At the end of the first quarter, Boeing’s cash dividend ratio was 2.2x, which shows that it has a strong dividend-paying ability.

In the final part of this series on Boeing, we’ll look at the stock’s price movement. We’ll also compare BA stock with its peers.

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