Boeing Is an Attractive Choice for Dividend Investors



Strong dividend growth

Boeing (BA) has always tried to enhance shareholders’ wealth through dividend payments and share buybacks. Dividends and share repurchases depict a company’s sound financial position and give investors confidence in the stock.

The aerospace and defense (IYJ) contractor has been paying a regular quarterly dividend for the last 80 years. Since 2012, Boeing has been raising its quarterly dividend once every four quarters. The company’s quarterly dividend has risen ~389% in the last seven years. Last year, Boeing distributed $3.95 billion in dividends, which was over three times higher than $1.26 billion paid in 2011.

In December, the company raised its quarterly dividend 20% to $2.055 per share.

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Dividend yield and payout ratio

Despite rising more than 33% year-to-date, Boeing stock still has impressive dividend yields. The company has a dividend yield of 1.9%, while Lockheed Martin (LMT) and General Dynamics (GD) have yields of 2.9% and 2.2%, respectively. Northrop Grumman (NOC) has a lower dividend yield of 1.7%.

Boeing’s dividend payout ratio is the second-highest ratio among its peers after Lockheed Martin. Boeing, General Dynamics, Lockheed Martin, and Northrop Grumman’s dividend payout ratios are 37.9%, 32.3%, 46.6%, and 26%, respectively.

Share repurchases

Boeing has also been enhancing shareholders’ wealth through aggressive share buybacks. After initiating the first share repurchase program in 2013, Boeing has repurchased ~$41 billion worth of its common stock. Last year, the company bought back $9 billion worth of its common stock.

In December, the company increased its share buyback authorization limit to $20 billion from $18 billion approved in December 2017.


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