Is it the right time to buy Boeing shares once again, or is this stock never going to recover? Well, to help you answer that question, you can read this Boeing stock investing guide. This page will give you an overview of Boeing's business, how it earns money, and its investment growth potential. Hopefully, after reading this, you'll be able to decide whether Boeing is a worthwhile investment or not.
Table of Contents
Learn How to Buy Boeing Stocks in 3 Easy Steps
Find a Broker
Finding a great broker to work with is essential to get the right tools and support to help you make sound investment choices.
Analyze Boeing chart
One of the trading tools that your broker provides is a charting application. This will be necessary to understand how Boeing's stock price behaves so you can find an appropriate price point to initiate your trade.
And once you find a good entry, the last step is to place your trade.
Boeing Company Overview
Boeing is an American company best known for making commercial jetliners in which it shares a duopoly with a rival: Airbus. But apart from passenger aircraft, Boeing also manufactures aircraft for the military, satellites, missile defense, human space flight, and launch systems and services. It also offers leasing and product support services.
With a $140 billion market cap, Boeing is one of the largest companies in the world. Its highest recorded revenue was in 2018 with $101 billion, and it managed to convert $10.45 billion into net income. However, the company faced major setbacks from the worldwide grounding of its 737 Max planes and the COVID-19 pandemic that curbed travel.
Boeing is headquartered in Chicago, Illinois with the current Chief Executive being Dave Calhoun.
Boeing Business Model and Revenue Streams
Boeing generates revenue from its four business segments: Commercial Airplanes; Defense, Space & Security; Global Services; and Boeing Capital.
Boeing's Commercial Airplane segment generated $4.73 billion in revenue in Q4 2020 and $16.2 billion for the whole year, comprising 28% of its total revenue. This segment provides the fleet of commercial jetliners and the complete family of freighters.
Its Defense, Space & Security segment, on the other hand, contributed $26.3 billion or 45% of its 2020 revenue. This, of course, is derived from the U.S. Department of Defense, its biggest customer.
Boeing's Global Services segment provided them with $15.5 billion or 24% of its revenue in 2020. This segment offers various solutions for commercial, defense, and space customers, including digital aviation and analytics, supply chain logistics, and training support.
Finally, Boeing Capital contributed the lowest revenue to the company, with $261 million in 2020. This segment provides financial services, particularly asset-based leasing and lending services.
History of Boeing
William Edward Boeing founded The Boeing Company in Seattle, Washington, back in 1916 after he and Conrad Westervelt created a single-engine, two-seat seaplane, the B&W.
It was originally called Aero Products Company but within a month was changed to Boeing Airplane Company. The company's client from that then on was the U.S. military, which it manufactured military aircraft for throughout the 1920s and 30s.
In 1928, Boeing also expanded into selling aircraft for delivering mail and by 1931 consolidated its smaller airlines into a single large airline, which is now known as United Airlines.
In the late 50s, Boeing flew its 707 for the first time. This airliner was a commercial success as the public was amazed at how they now can travel from New York to Los Angeles in a few hours.
A decade later, Boeing developed 747, the long–range wide-body airliner and cargo aircraft labeled as having democratized travel. This turned out to be the highest-selling commercial airline of all time, but it almost pushed the company into bankruptcy due to various production problems.
In 1995, Boeing created Sea Launch along with Russian, Ukrainian, and Anglo-Norweigian organizations. Sea Launch is a company that provides orbital launch services.
Boeing's headquarters were moved from Seattle to Chicago in 2001. Two years later, the company started taking orders for the 787 Dreamliner, but this airline was met with so many production problems that in 2013, it was even grounded by the U.S. Federal Aviation Administration for a short while due to the risk of battery fires. Still, 787 proved to be the aircraft that kicked off the new era of fuel-efficient aviation.
Fast forward to present times, Boeing has seen its aircraft deliveries grow each year, except in 2019 and 2020, when both years combined for only 537 aircraft delivered. Its stock reached its peak point in March 2019 at $446 a share and currently trades at $244.
Brokers That Offer Boeing Shares
Here we've listed our top choices of brokers that offer Boeing shares. Based on our review, these brokers have the best analytical tools and trading support to help you make sound investment choices.
Should I Invest in Boeing Stock?
Before its two main drawbacks, Boeing was a highly profitable company with a dependable client in the U.S. government and a booming Commercial Airplane segment. The reason to invest in Boeing is to bet on the company's recovery from its present troubles.
This goes back to the duopoly that's in play between Boeing and Airbus. When travel picks up again, only two firms vie for the larger market share. There is also reason to be hopeful since 737 Max grounding has been lifted, which means deliveries can resume.
And the company is also doing its best to stay afloat financially, cutting down its workforce and canceling its dividend payments since last year. The company's stock is also trading at its 2017 prices, which is the midpoint of a runup in price from 2016.
Boeing Stock Investment Potential
Despite its two-year slide that took its price to its lowest level in 7 years, Boeing's average annual growth rate over the last five years is still on the positive side at 13.03% and 11.39% over the previous ten years. If the company can return to form, the price it is trading at now is still relatively cheaper and offers more room for upside momentum even though it's already 174% higher from its dip in March last year.
What Kinds of Investors Should Include Boeing in Their Portfolios?
The kind of investors that should invest in Boeing, at least at this point, should have the stomach for going through another year of uncertainty for the company. Because while it's true that there are reasons to be optimistic about the company, there are still issues that the company is grappling with that could further stifle a recovery.
The company can indeed undergo tremendous growth and eventually surpass its 2019 apex, but that can only happen once there is a clear sign that COVID-19 is on its way out.
How Much Should I Invest in Boeing
In choosing the amount to expose in Boeing stock, you must consider two things: its investment growth potential and risk. And the reason is that if you know a stock can grow at a particular rate per year and carries a so-and-so risk, it's much easier for you to decide how much capital is comfortable for you to put on the line.
And from here, you can also decide on the investment frequency. You need to ask yourself if you plan on purchasing shares regularly, or do you want to time your entry at a relatively low price and make a lump sum purchase?
Being clear with all of these will help you make the best choice about the exact amount of funds you will allocate to Boeing.
How to Buy Shares in Boeing Stock?
So, before you even begin buying shares of Boeing, you must first get your trading account ready to go. This will be the first step in investing in the company, and in this step, it's crucial to find a reputable broker.
Brokers will have an online application form that you need to fill up and submit along with the other requirements. Your broker will usually take a few working days to review your application and approve it.
And when it's approved, you'll get notified by your broker through your preferred communication channel and will give you the go signal to fund your account. Select your broker's funding method that is most convenient to you. Normally, brokers offer these deposit options: electronic bank deposits, wire transfers, check, and account transfers from another firm.
The time it takes for your deposit to appear in your trading account will depend on the funding method you used. The quickest one is electronic bank transfers.
Then, once you see the deposit amount reflect in your trading account's balance, you're ready to place your first trade.
Buy Boeing Shares Using a Broker
Now, the application form that your brokers ask you to accomplish will typically need your personal information (e.g., name, address, date of birth). Brokers will also request that you submit identity proof, which can be your Tax Identification number (TIN), Social Security Number (SSN), passport, driver's license, etc.
Sometimes, brokers also ask about your employment details and even request proof of income. And this is because they need to comply with anti-money laundering regulations, anti-terrorist financing requirements, tax laws, and record-keeping procedures.
Buy Boeing Shares With a Direct Stock Purchase Plan (DSPP)
Direct Stock Purchase Plan or DSPP is another way to buy Boeing shares but without a broker. DSPPs are offered through a transfer agent. And, of course, the biggest advantage is that you will no longer incur a fee per transaction. You only need to put up the required initial investment amount and pay the setup fees. Then, you need to decide on the amount that will go directly to the purchase of Boeing shares.
However, if you take this route, you should know that you have to open a separate account for every company you want to invest in. This means that you need to pay every setup costs and cough up the required initial investment.
Boeing offers something similar to a DSPP, and that's a Dividend Reinvestment Plan (DRIP). DRIP allows investors to reinvest their dividend into additional shares of Boeing. But to participate, you must first make your initial purchase through a broker.
Frequently Asked Questions
The entire world expects somewhat a recovery from the pandemic this year, despite the virus hardly contained. An investment in Boeing now could be an opportunity to capture the company's stock price at a relatively lower price.
Boeing was a profitable business, but the worldwide grounding of its 737 Max planes after two fatal crashes caused it to lose money in 2019. And in 2020, the company reported its largest net loss of -$11.87 billion and is mostly due to pandemic travel limits.
An investment in Boeing is not only suitable on a long-term basis; there is also enough daily volatility to profit short-term.
The trading platform best for trading Boeing should have a complete set of technical tools to trade in any timeframe.
Trading Boeing's stock follows the standard market hours in the U.S. (9:30 am to 4 pm ET Monday to Friday).
Boeing is listed on the New York Stock Exchange (NYSE) under the symbol BA.