Boeing will close out the year with its shares up nearly 81 percent, by far the biggest gainer among the Dow Jones Industrial Index’s 30 stocks. The Dow itself is up 26.3 percent and the S&P 500 29.5 percent.
There was a time, not so long ago, when this would have been the biggest news in Seattle. When Boeing was still headquartered here, and even after the move when the Puget Sound region was the unquestioned center of Boeing’s Commercial Airplanes unit and much else.
Now the news is overshadowed by the possibility that the 777X will be built elsewhere if Machinists turn down a contract modification that would move from pensions to a 401(k) plan. Boeing has many other locations bidding for the new plane. It also has plans for a massive expansion of its new assembly in North Charleston.
At the end of November, Boeing employed 82,500 in Washington state, by far its largest concentration of workers. But that number is down more than 3,900 from January 2013.
No matter. Investors love Boeing. Orders and the backlog are strong for airliners. The defense sector hasn’t been hit as hard by sequester as many had feared. Its balance sheet is excellent. Earlier this month, Boeing raised its dividend by 50 percent and announced a $10 billion stock buyback. The dividend alone will mean about $2.19 billion to shareholders next year. (All of which made Machinists wonder why their pensions are a target for such a cash-rich company).
All of this has kept BA shares rising well beyond the trajectory of 2013’s bull market and make it a good bet for income and dividend investors whether the market continues to rise or not. That includes a good deal for Puget Sound shareholders, whether they own the company out of loyalty or self-interest.
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Today’s Econ Haiku:
Uncork the Champagne
Hope the market doesn’t pop
May your year sparkle