Boeing Falls as the Dow's Record Run Falls Flat

Boeing Falls as the Dow's Record Run Falls Flat

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average's recent winning streak is in jeopardy today as stocks struggle for gains in the final days of 2013. The Dow Jones pulled in gains early in the morning, but it's shed all that progress in the afternoon session: As of 2:30 p.m. EST, the blue-chip index is hanging flat, with its 30 member stocks split fairly evenly between risers and losers. Cisco's making the most of the day, as this big tech stock has outperformed the Dow and risen to the top of today's leader board, but Boeing has slid to the bottom of the index with a nearly 1% fall. Let's dive into today's Dow action.

Rising and falling for the year
Boeing and Cisco's fortunes today haven't matched their performances since 2013 begam. Boeing's been the best stock on the Dow this year, with shares exploding for year-to-date gains of more than 87%. Meanwhile, Cisco stock ranks among the bottom five Dow performers in 2013, with gains of less than 15% since the year kicked off.

Boeing's success has come as the company has pushed to cement its status as the world's dominant aerospace giant. The company's newest 777X and 787 airliners have made substantial progress in orders this year, despite the 787 grounding that headlined the first half of 2013. That progress has shown up in Boeing's numbers, as its contractual backlog for its commercial aerospace segment jumped by 8.5% between the end of last year and the end of September.

Moreover, Boeing's commercial aerospace operating margin has surged by 1.3% year over year through the first nine months of 2013, a remarkable feat for such a large segment. It has investors thinking optimistically about the future, particularly as Boeing projects strong demand in the commercial aerospace market to continue for the foreseeable future as Asia's airliner market picks up and the global economy's rise feeds gains in air traffic.

Cisco hasn't had the greatest of years despite today's 1% rise. Despite rising revenue, increasing operating expenses have hit its bottom line, with the company's net earnings per share for the most recent quarter dipping by more than 5%. Granted, it hasn't been all bad at Cisco: The company's performance in the Americas, its largest geographical segment by far, hasn't been anything to worry about. Both gross margin and total revenue picked up in the Americas in the most recent quarter, and if Cisco can figure out how to turn around falling sales in its Asia-Pacific region, that will be in a safe spot for the future going forward.

That's what dividend investors certainly are looking for, as Cisco's emerged as one of the Dow's stronger dividend stocks. The company pays out a 3.1% dividend yield, one of the higher yields among all Dow stocks, and maintains a dividend payout ratio of just 36%. That's sustainable for the long run, and while Cisco won't blow anyone away with its growth, it's still a highly profitable company with plenty of cash coming in through the front door.

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Originally published