Aerospace company Boeing announced that it has boosted its quarterly dividend and established a new buyback program. Here’s what this news means for mutual fund investors.
Inside the News
Dividend Increase
Boeing announced a 24.7% dividend increase after the closing bell on Monday. The next quarterly dividend of 91 cents will be paid on March 6 to shareholders of record on February 13. The stock will go ex-dividend on February 11.
Buybacks
The company will be raising its share buyback program to $12 billion. It bought back $6 billion in shares in 2014.
Great Yield, but Underperforming Compared to Airlines
Boeing now has a dividend yield of nearly 3%, but its stock price is down 8.45% YTD, compared to the outperforming airlines this year. Despite the dip this year, BA has a very healthy dividend yield and payout ratio. As long as its business remains strong, there is room for the company to continue boosting its dividend.
This news is great for investors, as it may result in Boeing being a target for dividend-focused mutual funds.
Mutual Funds to Watch
For investors seeking exposure to Boeing, one of the mutual funds listed below may be a good alternative to investing directly in the stock. The funds below currently have the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 3.38% |
| VFINX | Vanguard 500 Index | 0.99% |
| PRGFX | T. Rowe Price Growth Stock | 0.72% |
The Bottom Line
The funds listed above can be a great way to invest in Boeing while remaining diversified. Investors interested in Boeing may also be interested in Lockheed Martin (LMT).
Shares of Boeing are down 10% YTD.