From 2001 through 2003, Boeing’s dividend froze at an annual rate of $0.68 per share. From 2007 through 2012, Boeing’s dividend only grew by 3% annually and included a freeze of $1.68 per share from 2009 through 2011. Today, Boeing’s Board of Directors decided to reward shareholders with an eye-popping 30% dividend raise.
I mention the former context because these 30% days are not here to last. Sure, you might see big hikes in 2017, 2018, and even 2019, but Boeing’s business model reminds me of the Warren Buffett quip: “I’d rather have a bumpy 15% return than a smooth 10% return.” A typical decade for a Boeing shareholder will go something like this: 2-3 years of dividend freezes, 2-3 years of low dividend growth, 2-3 years of moderate dividend growth, and 2-3 years of crazy high dividend growth.