This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

General Electric Dividend Yield May Top 5% in 2012: Analyst (Update 1)

Stocks in this article: GE

General Electric dividend story updated to include forecast from UBS in seventh paragraph.

NEW YORK ( TheStreet) - General Electric (GE) may be able to boost its annual dividend to as much as 85 cents per year from its current level of 60 cents, according to Sterne Agee analyst Ray Young.

Such a rise would translate to a 5.1% yield given the GE stock price of $16.61 Wednesday afternoon.

As part of regulatory changes made in the wake of the 2008, GE's financial arm, GE Capital, is now regulated by the Federal Reserve. GE Capital executives spoke optimistically to investors Tuesday about resuming a regular dividend to the parent, which prompted Young to become more optimistic in his projections.

"We were surprised to learn at the outlook meeting that GE Cap will pay a dividend for all of FY12, and not just for the relevant quarter. Thus, there is a scenario that the GE current $0.60 dividend could get an additional boost of $0.20 - $0.25," Young wrote.

Young believes investors are skeptical about GE Capital paying a dividend to the parent in 2012.

"This arises from a complete lack of confidence in GE Capital's earnings power, and liquidity, and/or the Fed's ability to do their job. We disagree with the former, and while we acknowledge that the Fed at times can be short staffed, and potential delays could arise due to their thoroughness, we believe that GE's strong operational performance and valuation should not be affected by such a non-fundamental external factor," he wrote.

Not all analysts are not so sanguine. Jason Feldman of UBS forecasts General Electric will have a dividend yield of 3.9% in 2012 and 4.4% in 2013, according to a report published Tuesday.

But GE Chairman and CEO Jeff Immelt appears determined to raise its dividend regardless of what the Fed has to say.

Speaking to investors in October on General Electric's third quarter earnings call, Immelt said raising the parent's dividend to investors "is a real priority. I think that moves really independently of the Fed process and from the board and from my standpoint it remains an extremely strong priority for the company," he said.

-- Written by Dan Freed in New York. Follow this writer on Twitter.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs