Defense and Aerospace Opportunities for Dividend-Seekers
We think these firms will continue to be consistent dividend-payers as the commercial aerospace cycle goes on strong and U.S. defense budgets increase.
Chris Higgins
Chris Higgins, CFA, is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers aerospace and defense companies, airports, and airlines.
Before joining Morningstar in 2015, Higgins spent eight years working for Airbus Group in both the United States and Europe. While at Airbus Group, he held a variety of positions, ranging from corporate development to investor relations.
Higgins began career in strategy consulting, where he consulted leading U.S. and European aerospace and defense prime contractors. During his time in consulting, he led teams that solved business challenges ranging from merger and acquisition decisions to new product launches.
Higgins holds a bachelor’s degree in economics from Rhodes College, where he graduated as a member of Phi Beta Kappa, and a master’s degree in finance from The Henley Business School in the United Kingdom. He also holds the Chartered Financial Analyst® designation.
Latest
4 Takeaways From the Defense Budget Request
The proposal is mostly in line with our expectations, and our valuations haven't changed.
Boeing Groundings Could Cost Billions
We are not changing our 2019 forecast, but there will be a 1% decrease in our fair value estimate.
Boeing: Suspension of Deliveries Remains Real Risk
This weekend's 737 MAX 8 crash injects more uncertainty into an already high uncertainty name.
Strong 2019 Guidance From Boeing
Cash generation was the one weak spot in firm's results, and we view shares as slightly overvalued.
United Technologies Crushes Expectations
Shares of the wide-moat firm look cheap today.
United Technologies' Breakup Should Unlock Value
Our sum-of-the-parts assessment surpasses our current fair value estimate.
What Will Democrats' Control of House Mean for Defense Stocks?
Our projection for modest growth in the fiscal 2020 defense budget is now on shakier ground.
Boeing Impresses on Earnings, Operating Cash Flow
The wide-moat firm continues to execute and generate prodigious amounts of cash, but its shares look slightly overvalued.
Investors Have a Defense Stock Hangover, but the Spending Party Hasn't Even Started
We think the midterm elections could provide an investment opportunity as uncertainty rises beforehand.
Pacifico Calmly Leads Its Market
We believe this Mexican airport operator is the best positioned to take advantage of increasing traffic.
A Cheap, Wide-Moat Aerospace and Defense Firm
General Dynamics has a long track record of performing for investors and is one of the cheapest names we cover in the sector.
Boeing, Embraer Announce Regional Jet Joint Venture
We believe the tie-up is attractive for Boeing but give the arrangement about a 50/50 shot of going forward.
Boeing Cash Flow Impresses
We're raising our fair value estimate for this wide-moat firm after a strong first quarter.
China's Tariffs on Boeing Disconcerting but Likely Symbolic
The possible tariffs only target older 737 variants, but the news sent the stock down and shares are fairly valued today.
Boeing Still Looks Pricey
Given its need for new aircraft, we don't expect China to immediately place tariffs on jets, but that doesn't mean Boeing is cheap today.
Is a Breakup Imminent at United Technologies?
Don't bet on it. Here's why.
A Hard Landing for Embraer
This year continues to look like a transition one with lower year over year profit margins, as the narrow-moat firm moves the new E2 jets into production.
A Trade War Could Put 20% of Boeing Deliveries at Risk
The direct impact of tariffs is manageable for Boeing, but the risk of a trade war with China is a big concern.
Budget Deal Boosts Defense
But we expect a repeat of the 1980s, with a buildup followed by cuts.
More Turbulence Ahead for United Airlines
The airline has a lot of work to do to right its operations, and fixes will likely involve near-term pain.
Clearer Skies for Airlines
Bellwether Delta's results are encouraging, and we think airline stocks could be poised for a strong second half in 2018 due to falling fuel prices.
We Think These Aircraft Engine-Makers Are Undervalued
GE and Rolls-Royce are our top picks in the wide-body commercial aircraft industry.
Possible Boeing-Embraer Tie-Up No Surprise
Reports say the deal is in a holding pattern as the two parties await the Brazilian government's approval.
This Wide-Moat Mexican Airport Owner Is Appealing
Mexican domestic and international air traffic growth look quite strong, and we think Pacifico is a compelling opportunity.
U.S. Defense Budget Still Up in the Air
We think the most likely outcome won't have much effect on defense stocks.
Airbus-Bombardier Deal Is All About Squeezing Boeing
We expect Boeing to fight this partnership and think it may seek closer ties with Embraer.
Increasing Our Fair Value on American Airlines
New revenue opportunities that were quantified at the firm's latest investor day drove the $3 per share boost.
Reasonable Price, Strategy for Northrop Acquisition
With the plan to acquire Orbital ATK for $9.2 billion, we're raising our Northrop fair value estimate.
United Technologies Deal Strategic but Pricey
After acquiring narrow-moat Rockwell Collins, wide-moat United Technologies will increasingly trade like an aerospace stock and generate roughly 60% of its 2019 revenue from aerospace and defense.
U.S. Airlines Fly Back Onto Our Radar Screen
Undervalued Delta remains our top pick.
United Technologies-Rockwell Tie-Up Looks Likely
Rockwell is one of the few attractive targets that could move United Technologies' $57 billion revenue needle.
Plane Talk at the Paris Air Show
Wide-moat Boeing registered 56 wide-body deals.
Qatar Airways' Brash Move on American Airlines
We question both Qatar Airways' tactics and strategy.
Expect Boeing to Steal the Show in Paris
The wide-moat company will reveal details on its new midsize airplane and formally launch the 737 MAX-10 at next week's Paris Air Show.
Delta Our Top Pick Among U.S. Airlines
A commitment to returning capital to shareholders via a dividend increase and share buyback program combined with prudent capacity plans make this carrier a favorite.
United Expects Muted Impact From Flight 3411
Second-quarter guidance from the airline points to a muted near-term revenue impact from last week’s incident, says Morningstar’s Chris Higgins.
Skies Brighten for Delta
We've raised our fair value estimate on the no-moat airline.
Airlines Looking More Attractive
We think investors are overlooking the solid air traffic growth forecast for 2017.
A Closer Look at Trump's 10% Defense Spending Increase
Investors are optimistic, but we see many unknowns.
Transdigm's Business Model Remains a Success
We do expect revenue and profit growth at the aircraft part maker will moderate, however.
Investing in Delta? Buckle Up for Turbulence
We're encouraged by the recent evolution in passenger revenue per available seat mile, but we still see headwinds on the horizon for 2017.
Don’t Panic Over Weaker Jet Orders
Even with faltering demand for large wide-body jets, we still see investment opportunity in firms exposed to the strength of the narrow-body market.
3 Stocks That'll Benefit From the Narrow-Body Upcycle
Larger wide-body jets remain a concern for the likes of Boeing and Airbus, but narrow bodies look more secure.
Depsite Positive Outlook, Bumpy Ride for United
Although the airline has a few upsides specific to its business, we expect 2017 to be a tougher year.
Post-Election Uncertainty Impacts Mexican Airports
We believe volatility will persist over the next several months with three wide-moat Mexican airports that we cover.
Our Long-Term Thesis on Defense Contractors Is Intact
We expect defense names to move upward over the short- to mid-term and outperform the market.
One of the Widest Moats in Aerospace Is On Sale
Transdigm's revenue and profit growth are likely to slow, but the recent sell-off in its shares has been overdone.
3 Aerospace Firms Trading at Attractive Valuations
We think demand will remain solid for narrow-body aircraft, with Airbus Group, United Technologies, and Safran leading the way.
A New Wide-Moat in Aerospace
Transdigm's competitive advantages stem from intellectual property and high switching costs on its products.