The Boeing Company (BA): It Is Back With a Future

More than just aircraft

Boeing has competition in the aircraft industry. Airbus is the most well-known competitor, but investors shouldn’t forget the smaller Embraer SA (ADR) (NYSE:ERJ). mbraer SA (ADR) (NYSE:ERJ) is a Brazilian firm that makes aircraft that are mostly smaller than those made by Boeing and Airbus. Still, the company has a fine history of landing contracts and building value for investors. Since the first of the year, its market cap has grown 18.87%, and its operating margin last year was a fine 5.64%. The only real worry for Embraer investors is that the Brazilian government holds veto power over company actions, as Embraer was born of a government monopoly that was sold off.

Outside the commercial aviation industry, Boeing contends with some of the very largest firms in the world. Lockheed Martin Corporation (NYSE:LMT) is a company that can complicate Boeing’s life as a competitor. While not a maker of commercial aircraft, the company is one of the best at making military aircraft and other aerospace technologies. Boeing fights within its own weight class with Lockheed Martin Corporation (NYSE:LMT) – and, in fact, has a market cap more than twice Lockheed’s – but Lockheed is more tightly focused on the defense and aerospace markets. This focus gives Lockheed a leg up on building relationships and closing sales, and it shows in the firm’s performance. Last year’s operating margin was 9.4% and its shares have been on a roll, gaining 10.36% since the beginning of February.

Prepare for boarding

There is simply little reason for a sensible investor to avoid Boeing. The firm’s numbers look good, with a P/E of 16.99 and last quarter’s operation margin coming in at 7.30%.  Even with this quarter’s troubles it has outperformed the S&P by over 4%. The issue with lithium-ion batteries was a tempest in a media teapot. The only lasting effect it had was on the investors who saw the media storm, dropped out, and ended up losing value while people with more faith in Boeing either stayed in or increased their stake. Remember, if you had a thousand shares of Boeing on Jan. 1, 2013 and held them, you’d have gained $13,210 in value over the last three months. Think about that the next time some talking head tries to panic you into making a market move.

The article Boeing’s Back With a Future originally appeared on Fool.com and is written by Nate Wooley.

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