Boeing Hits a Snag as the Dow Fights Off a Loss
The market has had an up-and-down day, but the Dow Jones Industrial Average is up seven points and not far from another record high as of 2:30 p.m. EDT. Stocks on the blue-chip index are still split evenly between risers and losers. Boeing has been one of the unfortunate laggards on the day, dropping 0.7%, while a timely upgrade given Under Armour a big boost. Let's catch up on what you need to know.
Jobs growth can't keep up
The latest jobs report from payroll servicing company ADP began the day on a downbeat note, showing that only 179,000 new private-sector positions were added in May. Expectations had been for about 210,000, and last month's result is nearly 40,000 fewer jobs grown than in April. It also casts doubt on how Friday's Labor Department jobs report will shake out, as economists project a 210,000-job gain over last month. That alone is considerably less than April's surprising 288,000-job bounce, and today's jobs disappointment is another sign that the ongoing economic recovery still has a ways to go.
Boeing shareholders are finding their stock at the bottom of the Dow today, even with little news on the aerospace giant. In fact, Boeing's had a rather quiet year, with the stock down roughly 0.5% since 2014 kicked off, after last year's run-up. Still, for the long-term investor, it's hard to pick blue-chip stocks with more potential than this giant -- and the year's sluggishness makes for a strong buying opportunity. Boeing's 2.1% dividend yield alone -- at a 38% payout ratio that makes future dividend increases very manageable -- makes the pick a strong contender for income investors.
The company has also kept its contractual backlog and operating margin on the rise so far this year in its lucrative commercial aerospace division. While U.S. defense spending instability makes Boeing's defense, space, and security segment a less reliable business, its contractual backlog there adds up only to about 11% of the company's overall total. Commercial airplane sales are the bread and butter of this company, and with the Asia-Pacific aerospace sector booming and the rising economy a good sign for future air traffic, Boeing's in the perfect spot to capitalize for shareholders in the long run.
Elsewhere on the market today, athletic-apparel comoany Under Armour's jumped 5.4%, ranking as one of the top large-cap stocks on the market. Investment firm Jefferies upgraded the stock from hold to buy today, citing sales growth and the potential for Under Armour to capitalize on its popularity among youth. The company has certainly been all about growth lately: In its most recent quarter, Under Armour's revenue spiked by 36% year over year, yet somehow still disappointed analysts looking for more out of the forward guidance. For long-term investors, however, Under Armour has done a spectacular job of keeping growth up while emerging as one of the fitness and sports industry's top players. The company has seen remarkable success overseas lately, nearly doubling its revenue outside of the U.S. year over year in its most recent quarter. While America remains by far Under Armour's largest market, if the company can maintain brand popularity in the U.S. while expanding globally, this stock will be poised for good things to come.
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The article Boeing Hits a Snag as the Dow Fights Off a Loss originally appeared on Fool.com.Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Under Armour. The Motley Fool owns shares of Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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