Boeing (BA) Stock Was A Strong Buy Before US-China Trade Positivity

 | Jan 18, 2019 03:12AM ET

Shares of Caterpillar (NYSE:CAT) , Home Depot (NYSE:HD) , 3M (NYSE:MMM) , Boeing (NYSE:BA) , along with chip stocks such as Micron (NASDAQ:MU) , and other giants all surged Friday on the back of reports that say China could be willing to eliminate its trade imbalance with the U.S. But Boeing stock looked like a strong buy even before the positive trade talk news between the world’s two largest economies.

US-China Trade News

China has offered to boost its U.S. imports over a six-year stretch as part of ongoing talks between the two global powers, according to a report . China reportedly said it would increase its annual import of U.S. goods by a combined value of over $1 trillion to try to reduced and even eliminate annual trade deficits by 2024. If true, this news could spark a massive surge in the broader market as it might signal that the trade war between the U.S. and China could be coming to an end.

Overview

With that said, Boeing looks strong at the moment even if no trade war progress is made.

Boeing announced earlier this month that it delivered 806 commercial jets in 2018. This set a new record and crushed 2017’s 763 deliveries. BA did fall just shy of its target but topped European rival Airbus (OTC:EADSY) . The firm also added 893 new orders last year, valued at over $143.7 billion. These orders have been added to Boeing’s roughly seven-year backlog.

The aerospace power pointed specifically to strong sales of its newer 787 Dreamliner as a 2018 highlight. Boeing said that Hawaiian Airlines (NASDAQ:HA) switched from the Airbus A330 to its 787. Meanwhile, American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) bought more Dreamliner jets. Boeing’s 777 models also continued to perform well, driven by sales from FedEx (NYSE:FDX) , DHL Express, and others.

On top of that, Boeing detailed what it expects to be a significant increase in demand in India over the next 20 years. Investors should also note that Boeing in December announced a new quarterly dividend of $2.055 a share, which represents a 20% climb from the $1.71 per share it paid throughout 2018.

Price Movement

Shares of Boeing have soared over 24% since Christmas, along with much of the market, led by giants like Amazon (NASDAQ:AMZN) . BA stock also popped 1.40% to $364.09 a share through early afternoon trading Friday, after the China trade war news sent the Dow, S&P 500, and the NASDAQ up big.

We can also see that Boeing stock has outperformed its peer group, which includes General Dynamics (NYSE:GD) , Lockheed Martin (NYSE:LMT) , Northrop Grumman (NYSE:NOC) , and Airbus, over the last five years. Boeing stock rests roughly 8% below its 52-week high at the moment.