Boeing (BA) Payouts Should Ramp as 787 Production Increases
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Boeing (NYSE: BA) is slightly lower in early trading Friday following the maiden flight of the Airbus A350, which to take work away from the 787 Dreamliner.
But, investors shouldn't worry too much. Bloomberg notes that Boeing ramping production of its 787 Dreamliner will pave the way for profits. An increase of production is also needed to clear up some of the 800 787 orders currently on the books and make room as the company looks to start production on a stretched version of the airplane by 2020.
Additional production could boost annual revs by $6.7 billion and given Boeing's targeted payout of 80 percent of free cash flow in dividend, shareholders would see notable benefit. The move would follow Boeing's restart of its $3.5 billion buyback program last December following a 3.5 year delay in its Dreamliner program. The company also has a 48.5 cent quarterly dividend with a yield around 2 percent.
Not that investors haven't been anticipating the richer payout; shares of Boeing are up 37 percent since the Federal Aviation Administration (FAA) grounded the aircraft last January.
Currently production is targeted at 10 per month by the end of the year and Boeing has a target of 14 per month by the end of 2015. The addition of four more planes per month would boost revs by $6 billion per year, one Sterne Agee analyst commented recently.
The currently list price of the smaller 787-8 model is $206.8 million per airplane, while the larger 787-9 model is listed at $243.6 million apiece.
But, investors shouldn't worry too much. Bloomberg notes that Boeing ramping production of its 787 Dreamliner will pave the way for profits. An increase of production is also needed to clear up some of the 800 787 orders currently on the books and make room as the company looks to start production on a stretched version of the airplane by 2020.
Additional production could boost annual revs by $6.7 billion and given Boeing's targeted payout of 80 percent of free cash flow in dividend, shareholders would see notable benefit. The move would follow Boeing's restart of its $3.5 billion buyback program last December following a 3.5 year delay in its Dreamliner program. The company also has a 48.5 cent quarterly dividend with a yield around 2 percent.
Not that investors haven't been anticipating the richer payout; shares of Boeing are up 37 percent since the Federal Aviation Administration (FAA) grounded the aircraft last January.
Currently production is targeted at 10 per month by the end of the year and Boeing has a target of 14 per month by the end of 2015. The addition of four more planes per month would boost revs by $6 billion per year, one Sterne Agee analyst commented recently.
The currently list price of the smaller 787-8 model is $206.8 million per airplane, while the larger 787-9 model is listed at $243.6 million apiece.
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