Boeing flies high. Dow’s top stock up 60% this year

Boeing may be in a bitter battle with rivals Airbus, Bombardier and Embraer for global domination in the sky, but the airline maker and defense giant is the undisputed king of Wall Street this year. Its stock is in the stratosphere.

Shares of Boeing (BA) are up more than 60% so far in 2017, making it the top performer in the Dow Jones Industrial Average by far. Yup, Boeing is even ahead of Apple (AAPL, Tech30), which ranks second among Dow stocks with its 38% gain.
Boeing has soared along with other defense companies this year. In fact, it’s a continuation of a surge that began last year.

The iShares U.S. Aerospace & Defense ETF (ITA), which has Boeing as its top holding, is up 23% this year. That follows a nearly 20% surge in 2016.

Wall Street was betting before the U.S. presidential election that a win by either Hillary Clinton or Donald Trump would be good for defense stocks since both talked about boosting military spending during the campaign.

Since Trump’s victory, defense stocks have continued to shine. North Korea’s nuclear threats have investors even more interested in the sector. Two recent mergers are helping to keep the sector firmly on Wall Street’s radar as well.

Fellow Dow component United Technologies (UTX) announced earlier this month that it planned to buy Rockwell Collins (COL) for $ 23 billion. And Northrop Grumman (NOC) said Monday that it intends to acquire Orbital ATK (OA) for nearly $ 8 billion.

Boeing has expressed some doubts about the United Technologies-Rockwell Collins merger plan since that deal would unite two key Boeing suppliers and potentially lead to higher prices on some aircraft parts.

Related: Another big aviation merger takes flight

But the deal also shows the intense interest among aerospace and defense companies to find merger partners and take advantage of booming demand in the industry.

And Wall Street loves merger activity, which tends to boost stock prices as investors bet on who might be next to get bought.

Boeing, with a market value of about $ 150 billion and annual sales of more than $ 90 billion, is more likely acquirer than takeover target of course.

Still, investors are clearly betting that Boeing may not need to buy any of its rivals to stay on top. Orders are coming in for Boeing’s new 737 MAX and 787 (aka Dreamliner) commercial jets.

On the defense side, Boeing continues to see demand for its Apache helicopters as well as its missile defense systems.

The combination of Boeing’s commercial and military clout is a key reason why analysts expect profits to rise nearly 40% this year and grow at an annual rate of almost 20%, on average, for the next few years.

So it’s no wonder why Boeing stock is flying so high.