A major highlight of President Barack Obama's recent swing through Asia was his administration's commitment to increasing trade with India. Any expansion in the $37 billion in annual trade between U.S. and India bodes well for companies with stakes in both markets. After all, at $1.2 trillion, India has the 10th-largest national economy in the world -- and it's growing in excess of 6% a year.
Boeing (BA), the world's largest commercial and military aerospace company, enjoys a strong backlog of orders, partly thanks to commitments from customers in India. True, repeated delays in its 787 Dreamliner jet program have been an overhang on the stock, but it's still beating the market by a wide margin over the past 52 weeks. Even better, shares remain compellingly valued on a forward and trailing earnings basis, and the 2.4% yield on the dividend looks tempting, too.
General Electric (GE) has underperformed the broader market over the past year, in part because of GE Capital, whose balance sheet took a shellacking in the financial crisis. But GE Capital appears to have stabilized as competitors have left the industry. Meanwhile, GE spent the last two years shedding underperforming businesses. The stock looks like a bargain on a relative valuation basis, and the dividend yield stands at a nifty 2.9%
Infosys (INFY) is one of India's best-known information technology and consulting companies. Shares have soared about 45% in the last year, thanks partly to the rebound in corporate IT spending. As a tech stock in an emerging economy, Infosys has outsized growth prospects, and so the share price probably deserves a greater premium to earnings. But is the valuation topped out -- or has its rally just begun?
For the bull and bear cases on Boeing, General Electric and Infosys, see Face-Off on Stocks above.
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