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NEW YORK (The Street) -- South Korea rejected Boeing's (BA) - Get Boeing Company Report bid for a military contract worth $7.7 billion. The tender involves the supply of 60 military-grade fighter jets, the largest weapons inventory South Korea has ever purchased.

Reuters reports the decision was most likely due to public pressure. In late August, 15 former South Korean air force chiefs voiced their opposition to Boeing's F-15 Silent Eagle, stating it lacked the stealth and state-of-the-art features required to cope with an aggressive North Korea.

As the only company to propose an option within budget, Boeing was considered a shoo-in. South Korea's government has stated it will restart the tender process, potentially with a revised budget. Though originally over-budget, the government expressed interest in Lockheed Martin's (LMT) - Get Lockheed Martin Corporation Report F-35A aircraft model.

Despite the knock-back, Boeing shares are up 1.63% to $119.43 in early afternoon trading. Lockheed Martin shares are up 0.78% to $128.61. Overall, both companies are ahead of the S&P 500 which is up 0.23%.

On 'Mad Money' last week, Jim Cramer said these industrial plays should be strong performers going into the end of 2013.

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TheStreet Recommends

TheStreet Ratings team rates Boeing as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate Boeing 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 revenue growth, good cash flow from operations, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BA's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 281.82% to $3,467 million when compared to the same quarter last year. In addition, Boeing has also vastly surpassed the industry average cash flow growth rate of 62.41%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 70.3% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • Boeing has improved earnings per share by 11% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, Boeing reported lower earnings of $5.12 vs. $5.32 in the prior year. This year, the market expects an improvement in earnings ($6.52 vs. $5.12).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Aerospace & Defense industry average. The net income increased by 12.5% when compared to the same quarter one year prior, going from $967 million to $1,088 million.

Written by Keris Alison Lahiff.