But Glynn on Jan. 2 downgraded GE to a "perform" rating from "outperform," because "2014-15 represents a transitional period" that projects a compound annual growth rate for earnings-per-share in the mid single digits over the next two years. Glynn estimates GE's operating earnings will grow from $1.64 a share in 2013 to $1.70 in 2014 and $1.80 in 2015.
Despite the neutral rating, Glynn in his report on Jan. 2 called GE "solid store of value."
GE had $130.4 billion in cash and marketable securities as of Sept. 30. That cash hoard fed a $13.9 billion deployment of capital through dividends and share buybacks during the first three quarters of 2013. The company in December raised its quarterly dividend to 22 cents a share from 19 cents. The shares have a dividend yield of 3.26%, based on Tuesday's closing price of $26.97. The company's average diluted shares count declined by 3% year-over-year through Sept. 30.
"Our Buy thesis [is] straightforward -- a huge cash position, improving cost structure and focus on dividends and share repurchase should drive [GE's] earnings recovery," wrote Brian K. Langenberg of Langenberg and Co. in a note to clients on Dec 23. He estimates GE's fourth-quarter earnings will come in at 54 cents a share. His EPS estimate for GE in 2014 is $1.70, rising to $1.85 for 2015. Langenberg's 12-month price target for General Electric's stock is $30, while his three-year fair value estimate is $40 a share.
The following chart shows the performance of GE's stock against the Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) since the end of 2011:
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.