GE Capital in January completed its purchase of $6.4 billion in deposits from MetLife (MET) subsidiary MetLife Bank. This brought GE Capital's deposits to $49.4 billion as of March 31.
General Electric had $90 billion in cash as of March 31. Immelt said during the company's
first-quarter earnings conference call that it remained "committed to returning $18 billion to investors in 2013 through dividends and buybacks" of common shares. During the first quarter, GE repurchased $1.9 billion worth of shares.
GE's shares closed at $23.46 Friday, returning 13% this year, following a 21% return during 2012. The shares trade for 12.9 times the consensus 2014 earnings estimate of $1.82, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $1.66.
Based on a quarterly payout of 19 cents, the shares have a dividend yield of 3.24%.GE's shares were flat in late morning trading on Monday. BernsteinResearch analyst Steven Winoker rates General Electric "market perform," with a $25 price target. In a note to clients on Monday, Winoker wrote that GE Capital's Tier 1 common equity ratio at the end of March was at "a healthy level that supports the near term sustainability of the GECC dividend." GE Capital's planed $4.5 billion in special dividends this year is right in line with what Winoker previously incorporated in his earnings estimates for General Electric of $1.62 a share for 2013 and $1.81 a share for 2014. Winoker added that GE Capital's management team "has weathered the financial crisis well, improving their equity position even while shrinking the asset base and improving the quality of their portfolio." "Overall, we do like GE's strategic direction, execution appears to be improving, earnings are growing and capital allocation is still sound," Winoker wrote. "However we still question how much you should pay for the stock." "We believe something like a 50% premium to tangible book for GE Capital and as much as 16-17x 2013 earnings do not leave much near term upside," for General Electric's shares, Winoker wrote, "absent market moves and longer term earnings growth." GE data by YCharts
Interested in more on General Electric? See TheStreet Ratings' report card for this stock.
-- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
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
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts