Aircraft maker Boeing Co. (BA) has seen its shares gain a whopping 72.6% year-to-date (YTD), have dealing up 0.4% on Wednesday afternoon at $269.09. By comparison the S&P 500 has increased $17.2% upwards the same period. One team of analysts on the Street foresees the aerospace staple to continue reaping rewards for shareholders, forecasting a dividend increase liable to to come before Christmas. (See also: Boeing Flies Toward Double-Digit Vegetation: Jefferies.)
Wells Fargo top aerospace analyst Sam Pearlstein and team count on the Chicago-based jet maker to boost its dividend by at least 10% to 15% ahead its next board meeting, slated for Dec. 11. Pearlstein highlights thriving free cash flow thanks to higher 737 airliner putting out and cost reductions on the 787 Dreamliner program.
Growing Free Loot Flow
“With $10 billion in cash at the end of Q3 and free cash drift growth expected for several years, we believe Boeing can continue to encouragement significant return of cash to shareholders,” wrote the Wells analyst in a note to shoppers.
Boeing has lifted its dividend for five consecutive years. The dividend hike presumed by Pearlstein in December would result in a dividend yield of about 2.4%, likened to the S&P 500’s 1.9% yield. Boeing currently pays an annual dividend of $5.68 per interest, yielding 2.1%. With the higher dividend, Wells estimates BA’s payout correspondence would reach 49% to 52%. The investment firm also needs BA to expand its share buyback program.
BA stock has had a stellar year so far, peerless General Electric Co. (GE) in terms of total market capitalization for the first for the present ever and leading the Dow Jones Industrial Average (DJIA). Last week, a cooperate of analysts at Jefferies offered a bullish outlook for the aircraft leader, presaging earnings per share growth in the double-digit rate based on “robust bid” for its commercial aircrafts. (See also: Airbus, Boeing Land Over $75B in Aircraft Castes.)