Boeing Is Handing 3 Businesses to Archer Aviation and Closing a $131 Billion F-15 Order. Here’s Which Stock Gets the Better Deal.

Boeing is divesting three aerospace businesses to Archer Aviation while securing a massive U.S. military contract for its F-15 fighter jet program. These developments could greatly impact the long-term prospects of both companies, but they cater to very different opportunities. Archer gains revenue, technology, and a stronger defense presence, whereas Boeing strengthens an existing military business while simplifying its operations.

In August, Boeing agreed to sell Archer three subsidiaries: Wisk Aero, Insitu, and SkyGrid. Each brings something unique, with Wisk developing autonomous electric aircraft, SkyGrid handling air traffic management software, and Insitu manufacturing military drones. Insitu is the most valuable addition, already generating over $200 million in annual revenue and operating profitably across 35 countries.

Although Boeing doesn't receive cash for the three subsidiaries, it will acquire approximately 19.75% of Archer's pre-transaction Class A shares and warrants for potential additional purchases. This exchange gives Boeing exposure to autonomous aviation without bearing the full cost of the subsidiaries' development.

On the other hand, Archer faces dilution due to the deal, but it gains an established revenue-producing operation. Boeing is also strengthening its already substantial military business while simplifying its operations. While both deals appear promising, one stock offers a more compelling opportunity.

When deciding between these two companies, it depends on your risk tolerance and investment goals. Archer presents a more extensive opportunity for growth and diversification, though it comes with higher risk due to its pre-commercial status and dilution concerns. Boeing, on the other hand, offers a more financially mature business with a strong defense presence and improving cash flow, but its growth trajectory may be less dramatic due to its size.