Indeed, Boeing is still the global leading airplane manufacturer. After recovering from its new Dreamliner 787 delay, Boeing has surpassed Airbus to become the world’s biggest passenger airplane maker. According to Reuters, Airbus had a market share of around 41% with 833 aircraft net orders while Boeing took the lead with 1,203 aircraft net orders.
Boeing is trading at around $92 per share, with a total market cap of $69.9 billion. The market values Boeing at 8.7 times EV/EBITDA. Investors could get a decent dividend yield of 2.1% when investing in Boeing at its current trading price.
Peer comparison
Compared to its peers AerCap Holdings N.V. (NYSE:AER) and Willis Lease Finance, Fly Leasing has the highest leverage. The debt/equity of AerCap Holdings N.V. (NYSE:AER) is 2.7 while the debt/equity of Willis Lease is the lowest at only 1.5. AerCap is considered one of the global leading aircraft leasing companies with the youngest fleets in the industry, providing aircraft leasing and management services, with 212 aircraft and 7 engines.
Its weighted average owned aircraft utilization rate was around 98.4%. At the end of March, Cerebus Capital Management exited completely from AerCap after selling out as much as 8.2 million shares in the company. At $15 per share, AerCap is worth around $1.7 billion on the market. The market values AerCap Holdings N.V. (NYSE:AER) quite expensively at 13.7 times EV/EBITDA.
Willis Lease, the leader in leasing commercial aircraft engines, has a lease portfolio of 184 engines and related equipment, 7 aircraft and 4 spare parts packages. It provides its services to 78 lessees including commercial aircraft operators and maintenance, repair and overhaul organizations in 42 countries globally.
Like Fly Leasing Ltd(ADR) (NYSE:FLY), Willis Lease generated most of its revenue, $35 million, or 37% of the total lease revenue, in Europe. Asia ranked second with $18.6 million in lease revenue, while Willis Lease generated $11.7 million in lease revenue in the U.S. Willis Lease is trading around $19 per share, with a total market cap of $120 million. The market values Willis Lease at 8.5 times EV/EBITDA.
Among the three, Fly Leasing has the cheapest valuation at only 7.3 times EV/EBITDA. However, It is also the only company that pays dividends of the three. While Willis Lease and AerCap do not pay dividends, Fly Leasing offers investors juicy a dividend of 5.8%.
My Foolish take
Income investors might invest in Fly Leasing Ltd(ADR) (NYSE:FLY) for its high dividend yield. However, I do not consider Fly Leasing to be a good stock to buy due to its cyclical business and extremely high leverage level. Although I do not like the leasing business, I prefer the business of making aircrafts. Boeing, with its global leading position and the decent dividend yield, could be a long-term pick for investors.
The article Should We Buy This Stock for Its Yield? originally appeared on Fool.com and is written by Anh Hoang.
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