Boeing Co (NYSE: BA) is about as household as a name gets. Whether you’re talking about commercial aircraft, the international space station or the bombers that helped win WWII, Boeing is an iconic brand around the world.
At this point, Boeing has been building and flying planes for more than a century. Competition for air supremacy has waxed and waned over that time, but BA has always managed to maintain a secure position in the US aerospace sector.
Nowadays, however, BA is best known for its commercial aircraft and other defense work, beyond military aircraft.
Boeing Dominates Globally
What’s more, BA is no longer just a U.S.-focused player. It operates in 150 countries and has employees in 65 of them. And more than 70% of the company’s backlog is in countries outside the US. That’s why BA has over 20,000 suppliers and partner firms it works with around the world.
At this point, BA is enjoying its strongest growth in the commercial aviation division. And this growth should last for a very long time, as the global economic recovery helps boost travel, especially in Asia.
Asia — with China as the growth engine — is becoming a major world player. Right now, it has some of the most dynamic middle-class expansion on the planet.
As consumers have more spending power, they look to spend that money on leisure, like vacations and trips. Millions of Chinese citizens are now more able to explore the possibilities of air travel, both domestically and internationally.
This demand has essentially started at zero and taken off quickly. Today, the top 4 airlines in Asia are all Chinese.
Another growth region is the Middle East. Carriers like Emirates and Etihad are becoming major global carriers.
All this has been a boon to BA, since its only real competitor on the global scene is Airbus SE, and both have strong moats built around their global dominance.
Boeing’s Diversity Is Great News for BA Stock
BA also has deep ties in the defense sector, both at home as well as with allies abroad.
But it’s no longer its planes that bring in the money in this sector. The growth and demand are for Boeing’s drones, satellites and aerospace work.
What’s more, BA won a pioneering effort to build a wall in the U.S. southern border. The proposal was a combination of physical deterrence integrated with high tech surveillance using drones, cameras and border patrol forces.
The project stalled a few years ago, partially because the plans were ahead of the technology at the time. That is likely not the case now. And given the Trump administration’s desire to build a wall, BA might a prime contractor to get it done.
And given the news out of Washington that budget talks are promising more than $300 billion in new defense spending over the next 2 years, there’s little doubt BA will be a beneficiary in a big way.
BA stock is off 4% in the past week, but up more than 100% in the past 12 months. That long-term trend is your friend.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.