Boeing vs. Airbus: Which One is Still a Buy in 2024?

Investing
Boeing vs. Airbus: Which One is Still a Buy in 2024?

The aviation industry, which took a brutal hit during the pandemic, has been navigating a bumpy recovery. With recent incidents involving Boeing’s 737 Max series casting a shadow on the company, investors are wondering: is Boeing still a viable investment compared to its European rival, Airbus?

Boeing’s Struggles

  • Recent Incident: A panel falling from an Alaska Airlines 737 Max 9 sparked immediate grounding of all Max 9s by the FAA, raising concerns about Boeing’s quality control.
  • Reputational Damage: The 2018-2019 crashes involving the 737 Max continue to weigh heavily on the company’s image.
  • Financial Woes: Boeing reported a loss in its latest figures, and the lack of a dividend and a calculable PE ratio paint a challenging picture.

Airbus’ Advantages

  • Strong Performance: Airbus delivered a record number of aircraft in 2023, surpassing Boeing, and secured significant new orders.
  • Steady Growth: Airbus shares have seen a consistent upward trend over the past year, with profits and a small dividend adding to the appeal.
  • Quality Control: Airbus seems to have managed its surge in orders without compromising quality, avoiding incidents like Boeing’s.

Expert Opinion

Rodney Hobson, an overseas investing expert, recommends avoiding Boeing given the risks and selling any existing shares. In contrast, he sees Airbus as a better investment opportunity, even at its current elevated price due to its strong performance and financial stability.

Data Comparison

CompanyLatest PriceYTD Change (21st Jan)PE RatioDividend Yield
Boeing (BA)$215.02-14.59%N/AN/A
Airbus (AIR)€148.84+5.35%29.281.2%

Additional Considerations

  • Geopolitical factors: The ongoing war in Ukraine could impact both companies, but Airbus might be less exposed due to its diversified production base.
  • Global economic recovery: The pace of the global economic recovery will play a crucial role in future aircraft demand, influencing both companies.

Bottom Line

While Boeing offers potential for a significant rebound if their issues are addressed, the near-term outlook remains uncertain. Airbus, with its consistent performance and solid financial footing, appears to be the safer bet at this time. However, both companies are heavily exposed to economic and geopolitical factors, necessitating careful monitoring and risk assessment before making an investment decision.

It’s important to remember that past performance is not a guarantee of future results, and any investment involves risk. Conduct thorough research and consult with a financial advisor before making any investment decisions.

  • Adam Grant

    Adam Grant is a highly qualified writer with a solid educational background in finance, holding a Bachelor's degree in Economics and a Master's degree in Business Administration (MBA). With his expertise in financial matters and a deep understanding of investment principles, Adam shares his insights to educate readers on the importance of financial literacy and smart investing strategies. Additionally, he has pursued courses in health and wellbeing, allowing him to offer a holistic perspective on achieving overall wellness in conjunction with financial stability.

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