The biggest plane manufacturer in the world – Boeing Co. – emphasized on its confidence by announcing a 25% increase in quarterly dividend payments, while also expanding its share-repurchase program to $12 billion, making it the largest one in its entire history.
The buyback takes the place of a $10-billion program, which was implemented in 2013. A total of $4.8 billion was left unspent by the previous program. In addition, Boeing revealed that repurchasing shares in the current year had been finalized after spending a total of $6 billion and is expected to be resumed in January 2015.
The Chief Executive Officer of Boeing – Mr. Jim McNerney said in a statement: “Strong operating performance across our business continues to generate significant cash flow and financial strength for Boeing. That strength, coupled with the solid growth outlook for commercial aviation… provides us with the foundation to continue our balanced cash deployment strategy, investing in our core programmes while increasing shareholder value.”
According to the companys statement, the dividend payout will be raised from 73 cents per share to 91 cents per share and will be payable March 6th to shareholders of record as of February 13th. In comparison, analysts projected a 14% increase to 83 cents a share.
The dividend hike comes despite the large amount of investments being made by Boeing in order to boost the deliveries of its most popular commercial jets, which include the companys 787 Dreamliner, as well as its new 737 Max and 777X models.
The companys move comes as a reward to U.S.-based Boeings shareholders, who have retained their trust and confidence in the company even as its shares dropped as tumbling oil prices and slowing growth in Asia fanned concerns over jet sales in the region. Boeing reported a hefty third-quarter rise in profit, but cash generation trailed projections. Nevertheless, the aircraft manufacturer had promised very strong cash flow in the current quarter and signaled confidence of achieving this pledge with yesterdays move.
Boeing Co. rose 1.08% on Monday in New York to close at $122.08 per share, marking a one-year change of -8.78%. The company is valued at $86.10 billion. Shares stood 1.55% higher at €101.100 in Frankfurt at 8:49 GMT on Tuesday. According to CNN Money, the 21 analysts offering 12-month price forecasts for Boeing Co. have a median target of $150.00, with a high estimate of $175.00 and a low estimate of $101.00. The median estimate represents a +22.87% increase from the last price of $122.08.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
