Cramer says the company has plenty of firepower to buy back stock or raise its dividend, but it's just a "bond" stock for now until P&G does something radical, and Cramer does not believe that will happen anytime soon to bring in more sales. In his words, it's "nothing really to right home about."
Boeing (BA), on the other hand, impressed Cramer. The stock went from $144 down into the $120 range but he thinks it can return to $144 thanks to its clear growth path and the fact that airlines have lots of capital. As a result, he says Boeing is "definitely a buy."
Finally, Cramer says Dow Chemical (DOW) received a muted response to its solid quarter, but he thinks this will change and the stock will reach the mid-$50s. He believes CEO Andrew Liveris is delivering and taking advantage of North American natural gas and is building plants in the U.S. Cramer does not think Dow Chemical needs to split up.Must Watch: Jim Cramer on P&G, Boeing and Dow Chemical Earnings
"We rate BOEING CO (BA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BOEING CO has improved earnings per share by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BOEING CO increased its bottom line by earning $5.97 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($7.38 versus $5.97).
- The net income growth from the same quarter one year ago has exceeded that of the Aerospace & Defense industry average, but is less than that of the S&P 500. The net income increased by 26.1% when compared to the same quarter one year prior, rising from $978.00 million to $1,233.00 million.
- Powered by its strong earnings growth of 25.78% and other important driving factors, this stock has surged by 45.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: BA Ratings Report
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