NEW YORK (TheStreet) -- Boeing (BA) shares are up 2.03% to $124.56 in trading on Tuesday after the commercial airline and military aircraft vehicle manufacturer announced that it was raising its share buyback program to $12 billion from $10 billion.
Separately, the company also said that it was increasing its quarterly dividend by 25% to 91 cents from 73 cents, thanks in part to the $4.8 billion the company had left over from its previous stock buyback program.
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"Strong operating performance across our business continues to generate significant cash flow and financial strength for Boeing," said CEO Jim McNerney.
Boeing said that it has completed its stock purchases for 2014, spending $6 billion to buyback its shares, and that it will resume repurchases through its new program in 2015. The newly announced program is expected to run for two to three years, according to the company.
TheStreet Ratings team rates BOEING CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"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 revenue growth, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. 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 0.5%. Since the same quarter one year prior, revenues slightly increased by 7.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BOEING CO has improved earnings per share by 23.2% 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 two years. 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 ($8.35 versus $5.97).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Aerospace & Defense industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $1,158.00 million to $1,362.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Aerospace & Defense industry and the overall market, BOEING CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- BA has underperformed the S&P 500 Index, declining 6.94% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
- You can view the full analysis from the report here: BA Ratings Report