The Boeing Company (BA): ‘Air Traffic to Double Within 20 Years’

Other players needed to make planes

With all those new aircraft in the sky, there will also be the need for state-of-the-art hydraulics. Parker-Hannifin Corporation (NYSE:PH) adds up to a buy for the technical investor: its return on equity is around 19%, and operational margins are 12%, which is just above the 11% industry average. The financial stability of the company indicates it is ready to deliver when called upon for its hydraulics systems.

The company was part of the June 14 Airbus and Rolls-Royce first flight of the Trent XWB. Parker provided the fuel and hydraulic systems, landing gear hydraulic dressing, engine built unit, and other equipment for the twin-aisle jetliner. The successful launch is a major boost for Parker because the aircraft is state-of-the art in its abilities to be comfortable for passengers, fuel-efficient and reliable. That boosts Parker’s street cred.

Parker-Hannifin Corporation (NYSE:PH)’s business-segment revenue is fairly distributed internationally, which means the firm could meet the demand of any nation that asks for its high-end products — thus meeting the demands of globalization. The company is certainly cutting edge, and diversified.

On June 10, it released a new compressed air testing device that can detect microbial contamination in compressed air systems. The device is appropriate for testing food contact surfaces and food itself, as well as the dark, moist habitat in compressed air systems that could result in infected food and food surfaces.

According to the company’s press release, the device is in demand because it is much less expensive than comparable devices. That could lead to major profits from the sale to restaurants and factories that produce food.

Where to put your money

As long as teleportation remains fictional, investors can be certain of rising profits for companies in the aerospace industry. Betting on Boeing is putting all your chips into the industry, but if the sector takes off, so could your portfolio. Honeywell and Parker Hannifin, while heavily weighted in aerospace, are more diversified and could be the safer bet for the conservative investor.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Boeing: ‘Air Traffic to Double Within 20 Years’ originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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