Boeing Is Owned by Stockholders, Stock Is a Decent Buy Amid Recovery

Mohit Oberoi, CFA - Author
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Feb. 16 2022, Published 8:52 a.m. ET

The global aviation industry has been a duopoly for years led by Europe-based Airbus and Boeing. Who owns Boeing and how can you invest in the aviation giant?

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The global aviation industry went through significant pain in 2020. Globally, airlines grounded their fleets due to COVID-19 restrictions. There were intermittent travel restrictions after the initial curbs were lifted.

The global aviation industry struggled COVID-19 pandemic.

As airline companies struggled to stay afloat, ordering new aircraft was the last thing on their mind. This led to lower revenues for both Airbus and Boeing. The pain spread across the value chain and parts suppliers to aircraft companies also saw a slowdown in orders.

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Berkshire Hathaway, which is led by the legendary Warren Buffett, also felt the pain of the aviation crisis. In April 2020, Buffett sold all of the four airline companies that Berkshire Hathaway was holding. The transaction led to a loss for Berkshire. The company also booked an almost $10 billion asset write-down on its subsidiary Precision Castparts, which supplies parts for aircraft.

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Boeing was formed in 1916.

While Boeing was formed in 1916, the process started several years before when William E. Boeing attended the Los Angeles International Aviation Meet. Boeing developed a passion for aviation after the event and eventually incorporated Pacific Air Products in July 1916. The next year, the company’s name changed to Boeing Airline Company.

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Boeing went public in 1962.

In May 1961, the company changed its name to Boeing. The company went public in 1962 and started to trade on the NYSE. Boeing has made several acquisitions throughout its history. In 1996, Boeing acquired Rockwell’s aerospace and defense units. The next year, it merged with McDonnell Douglas Corporation.

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Is Boeing a private company?

Boeing was a private company before 1962. However, it became a publicly-traded company after the IPO. The company paid regular dividends but suspended that in 2020. The last dividend was paid in March 2020. Several U.S. companies suspended their dividends in 2020 amid the uncertainty over the COVID-19 pandemic.

Many of the companies have restored the dividends. However, some companies including Boeing, General Motors, and Disney haven't restored dividends yet. General Motors and Disney are spending on growth and have delayed the dividend restoration.

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Who owns Boeing?

Since Boeing is a publicly-traded company, it's owned by its stockholders. Newport Trust Company is the biggest stockholder of Boeing and holds a 7.53 percent stake. It's an independent investment manager for Boeing’s employee stock ownership plan.

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The Vanguard Group, State Street Global Advisors, and BlackRock are the other leading investors holding 7.39 percent, 4.56 percent, and 4 percent stakes in Boeing. Since Boeing is part of the S&P 500, these companies have the stock as part of their S&P 500 ETFs.

Is Boeing a good investment?

Since Boeing is a publicly-traded company, you can buy the stock through your broker. The company is a play on the reopening and the gradual recovery in the aviation market. The stock has come off its highs and it looks like a decent buy at these levels.

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