GE's stock has a current yield-to-price of nearly 3.13% representing a sustainable 52% payout ratio. Which brings me to the latest good news that increases GE's ability to "bring good things" to shareholders.
As Cramer and Link explained it: "GE raised its dividend by 12% and increased its share-repurchase program by $10 billion, to be spent by 2015. We have written that we expected a dividend increase of 10%, so this is a little more than that, but we are surprised with the buyback announcement and are pleasantly surprised."
They went on to explain, "The analyst day is Monday (12/17), and we believe we will hear a fairly upbeat presentation, with clarity on margin expansion for its industrial segment and on the long-term strategy for GE Capital. We could see further shrinkage of this division and an eventual spinoff down the road..."
Shares, in their opinion and in mine, are "compelling at the current valuation." We also look at GE as a play on the energy and industrial infrastructure story as well as the recovery in China. All interested shareholders and potential ones will anticipate hearing what CEO Jeff Immelt has to say on Monday.Candidly, I find GE a proactive company with some excellent long-term plans. I'm adding to my own holdings of it at around $21.70, hoping to collect the increasing dividend and anticipating the ongoing rejuvenation of an old name that knows how to play the "game" of reinventing itself and thriving. At the time of publication the author had a position in GE. This article was written by an independent contributor, separate from TheStreet's regular news coverage. Most large-cap stocks were once small- and mid-cap stocks. Bryan Ashenberg is here to help you find the cream of the crop amongst the market chaos.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV