The Boeing Company (BA): Value for Money?

Airbus jets are designed and manufactured by European Aeronautic Defence and Space (NASDAQOTH: EADSY). Its management estimates that A380 deliveries will remain lackluster, and doesn’t expect spectacular growth in FY13, either. EADS management said: “The A350 XWB programme remains challenging. Any schedule change could lead to an increasingly higher impact on provisions.” This certainly doesn’t portray an optimistic picture for fat margins.

Conclusion

The battery problems in Boeing’s Dreamliners may have forced airlines to ground their 787s, but I don’t think this will tarnish the company’s reputation. The management of The Boeing Company (NYSE:BA) said that it would compensate airlines for their losses due to the inconvenience, and as far as flight security is concerned, US authorities have ruled out the possibility of any other electrical faults. This led to a consensus that fixing the battery would permanently get rid of the fire problems.

Although that compensation (whether big or small) would strain its cash flows and put a negative pressure on its share price, I think this gives Boeing investors an opportunity to buy it on dips. Boeing is reporting staggering growth in orders despite having over $58 billion in enterprise value (by market cap), and it appears to be a solid growth pick. Its shares yield a modest 2.51% with a healthy 34.97% payout, and I think Boeing deserves a buy rating.

The article Boeing: Value for Money? originally appeared on Fool.com.

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