This Day On The Street
Continue to site
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

Big Dividend Plays With Long-Term Gains

GE Chart GE data by YCharts

General Electric (GE - Get Report)

Background: General Electric is one of the largest and most diversified industrial corporations in the world. GE makes and sells products for the generation, transmission, distribution, control and utilization of electricity. GE trades an average of 41 million shares per day with a market cap of $222 billion.

52-Week Range: $14.68 to $23.18

Book Value: $11.65

Price-to-Book Ratio: 1.8

Earnings Payout Percentage: 52%

GE dropped more than 5% in the last month. For those who bought at the top, ouch, but I wouldn't get too excited about selling here and taking a loss. I believe GE is now on sale and ready to move higher.

If GE doesn't move higher, you will "have to" settle for the oversized and relatively safe 3.2% yield. That's a big yield in a world with near zero inflation (if you think the government numbers are accurate anyway).

Even after losing 5% recently, the one-year gain is over 20%. GE appears to offer much more upside. Analysts are calling for a price target of $24.86 per share. I think they have it too low, and I think a one-year price target closer to $27 is more likely.

GE has beaten estimates in three out of the last four quarters, and with next year's earnings estimate of $1.71 per share, the P/E is less than 16. GE is a great name with growth and leadership for only 16 times forward earnings.

Short-sellers may be paying attention to GE, but they are not shorting it, and just 0.6% of the float is short based on the last reported numbers. GE Payout Ratio TTM Chart GE Payout Ratio TTM data by YCharts

What is better than buying a bull-trending stock paying a large dividend? How about a bullish dividend-paying stock on sale?

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ABT $44.22 -0.04%
AAPL $110.22 -1.90%
GE $24.47 -0.41%
MDT $70.76 -1.10%
T $33.03 0.64%

Markets

Chart of I:DJI
DOW 16,398.25 +46.87 0.29%
S&P 500 1,957.04 +8.18 0.42%
NASDAQ 4,752.6150 +2.6360 0.06%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs