Boeing boosts dividend by 10%
Boeing increased its dividend by 10 percent, the most since 2007, and resumed a $3.6 billion share-buyback plan to reward investors.
Boeing increased its dividend by 10 percent, the most since 2007, and resumed a $3.6 billion share-buyback plan to reward investors as its shares trail gains for the parent of its largest competitor Airbus.
The planemaker’s quarterly dividend will climb to 48.5 cents a share from 44 cents and be payable March 8 to shareholders of record as of Feb. 15, Boeing said in a statement. The company plans to buy back as much as $2 billion of shares in 2013.
Boeing’s buyback revives a program authorized by directors in October 2007, the month it disclosed the first of what would become more than three years of delivery delays for the 787 Dreamliner.
Boeing likely will buy back the $2 billion of shares “fairly quickly” and announce a new program heading into 2014, Peter Arment, an analyst with Sterne, Agee & Leach, said in a note.
“We think there will be more to come,” wrote Arment, who recommends buying the stock.
Since the 1997 merger with McDonnell Douglas, Boeing has spent just over $20 billion on stock buybacks.
The cash deployment comes as Boeing stock has suffered from delays to the new 787 Dreamliner model that has hurt the company’s credibility. The shares are down about 26 percent since the first delay was revealed in October 2007.
Boeing had $11 billion in cash as of Sept. 30, which could swell as the company completes a planned 60 percent production increase in the four years ending in 2014 to work through a $307 billion order backlog.
The stock buyback and dividend news was announced after the stock market closed Monday. Boeing’s stock was little changed in extended trading Monday after closing up 0.9 percent to $74.65 in the regular trading session. The shares have gained 1.8 percent this year, compared with gains of 21 percent for European Aeronautic, Defence & Space , the parent of Airbus, and 14 percent for the Standard & Poor’s 500 Index.
Seattle Times staff contributed to this report.