Is Rail Enough for Bombardier, Inc. (BBD.B)?

The Boeing Company (NYSE:BA) has consistently shown its prowess at luring aircraft buyers to its product with United Airlines as a major buyer. At the Paris Air Show alone, the firm managed to claim orders at about $66 billion. Those orders set the business up nicely for at least the next ten years, as that is how long it takes to fill many of the orders. The amount includes around 442 aircraft.

Does Bombardier warrant a buy?

While I am not an investor who makes purchases based on speculation, I see major potential in Bombardier, Inc. (TSE:BBD.B)’s ability to increase profits if it secures the Cross rail project. Furthermore, the firm is willing to take on more business, unlike Siemens AG (ADR) (NYSE:SI), and that could mean the company will have less competition to worry about for future projects.

However, Bombardier needs to show that its aerospace sales can compete with competitors such as Boeing. According to officials with The Boeing Company (NYSE:BA), air traffic is set to double within the next two decades. That shows major potential for Bombardier, though that division of the company has performed below market average since 2008.

As a final note, it should be noted that Bombardier is a diversified company, with its air and rail operations, while Boeing only operates in the aerospace field. I’m cautiously optimistic about Bombardier, though I think current activity indicates the firm will increase exposure to rail projects while decreasing activity in its aerospace division.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Is Rail Enough for Bombardier? originally appeared on Fool.com is written by Phillip Woolgar.

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