Better Buy: Boeing vs. Caterpillar
Even if two stocks don't operate in the same industry, comparing the investment propositions for both -- and how they might work in your portfolio -- is a very useful exercise for investors. Simply put, Boeing's (NYSE: BA) big earnings driver in the next year (the return to service of the 737 MAX) isn't dependent on the cyclicality of the economy, while Caterpillar (NYSE: CAT) faces significant question marks around a number of end markets in the near future. With this stark contrast in mind, let's look at which stock might be the better buy for your portfolio.
As CEO Dennis Muilenburg clearly states in every company presentation, the company's first concern is getting the 737 MAX back into service. Muilenburg believes the aircraft will be back flying in October, and investors hope he's right. After all, as discussed on Boeing's second-quarter earnings call, failing to get the 737 MAX back in service could lead to a production shutdown -- a costly and disruptive exercise. But a successful return would see Boeing on the path to ramping up production from the current rate of 42 a month to 57 a month in 2020.
A Boeing 737 MAX. Image source: Getty Images.
Source Fool.com
