Cramer Expects Boeing to Outperform the Dow
Boeing is one of four stocks likely to outperform the Dow Jones industrial average in 2012, Cramer said Friday.
The airplane maker is posed to have one of its best years in ages, the "Mad Money" host said, because it is benefitting from the powerful aerospace cycle. Right now, airlines desperately need to buy the latest fuel-efficient planes in order to reduce sky-high fuel costs. And to Cramer, Boeing is the most obvious way to play this cycle.
Boeing already had a good year in 2011, Cramer noted, with its stock up 10.8 percent when reinvested dividends are included. He thinks 2012 will be just as profitable because commercial airplane orders rose by 52 percent last year to 805 aircraft and the company had a backlog of 3,771 planes in the pipeline. Looking ahead, the new orders should only continue to grow.
Another reason Cramer likes Boeing is because it pays a dividend. Last month, the company raised its dividend by 5 percent. So it now yields at nearly 2.4 percent.
On top of it all, the stock is selling for just 14.8 times earnings with a 13.4 long-term growth rate that may be too conservative. To Cramer, this stock is simply a bargain.
Read on for Cramer's "Diamonds of the Dow" — the four stocks he thinks could outperform the Dow in the year ahead.
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