Boeing Continues to Shower Shareholders With Cash

Boeing Headquarters. Image source: Boeing.

It's a Bird ... It's a Plane ... It's ... A soaring Boeing dividend? That doesn't really have a ring to it, I'll keep working on it.

While 2014 has failed to bring Boeing investors the amazing returns witnessed last year, as the stock has traded sideways all year long, one thing that continues to soar is the aviation juggernaut's dividend. Monday, after market close, Boeing announced that it would be returning even more value to shareholders. Here are the details and what investors can expect in the years ahead.

Show me the money! Boeing chairman and CEO Jim McNerney announced the company's increased authorization for its share repurchase program up to $12 billion. This authorization will replace the one approved in 2013 which had roughly $4.8 billion remaining. Boeing has repurchased $6 billion this year and will continue to buy back shares beginning next month.

In other shareholder-friendly news, Boeing also jacked up its dividend by a healthy 25% to $0.91 per share.

The commercial airplane manufacturer has a strong history of consistent and reliable dividend increases dating all the way back to the mid-to-late 80's. In fact, Boeing has never decreased its dividend and over the last decade has increased it a staggering 192%. Heck, Boeing has increased its dividend by 88% over the past two years alone.

Graph by author. Information source:

"This increase affirms our commitment to a balanced cash deployment strategy that delivers consistent returns to our shareholders," said Boeing Executive Vice President and Chief Financial Officer Greg Smith, in a press release. "This disciplined approach allows us to continue to invest in productivity and innovation and provides us with a strong foundation for growth."

Perhaps the best news for Boeing investors is that these trends of returning value to shareholders appear poised to continue. Consider that Boeing has a massive $490 billion backlog, which is almost 5 times estimated revenue for all of 2014. That offers investors quite a bit of revenue transparency and comfort in times of uncertainty. In addition to the massive backlog of orders, Boeing estimates that demand for 36,770 aircraft will materialize over the next two decades, that's valued at $5.2 trillion -- that's trillion with a capital "T".

Looking ahead, Boeing should be able to continue dishing cash to shareholders. One reason is because Boeing has made progress on its net pension liability, which has consumed roughly $1.5 billion of Boeing's cash in both 2012 and 2013. Also, Boeing's 787 Dreamliner should reach profitability in 2016 which will help the company's overall profitability. On top of those two things, Boeing is continuing to accelerate its production pace with the 737 reaching 42 per month in 2014, up from 38 per month. The 787 continues to produce roughly 10 airplanes per month, versus an average of seven per month last year.

As those events develop in the years ahead, Boeing will continue to generate significant cash flow and will boast financial strength. In the meantime, rest assured that Boeing will continue to return value to shareholders through significant dividend increases and share repurchases.

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