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Shareholders of General Electric Co. (GE) - Get General Electric Company Report , especially those who are retired and are (or were) relying on the stock's quarterly dividend to fund their living expenses, should reconsider their rationale for owning the stock and review their options.

With the prospect of the worst-performing stock in the Dow for 2017 delivering disappointing results Friday morning, investors in GE might need to consider alternatives, depending on their circumstances.

GE has halved its dividend, to 12 cents a share from 24 cents, but it also has positioned itself to be a turnaround story.

GE shares rose 2.4% to $13.99 Thursday, and are down about 20% so far this year. Read: GE Investors Brace for Disaster, Will Settle for Disappointment

Back in November, John Flannery, the CEO of GE, announced plans to restructure the company and focus on healthcare, aviation and energy, and the dividend cut.

"Investors liked GE because it was a stable company with a consistent rising dividend," Peter Snow, director of investment research with NFP Corporate Benefits, said at the time. "GE no longer has that profile."

Younger, longer-term investors may have the luxury to hold on to GE shares for the next 5 or 10 years, if there are signs the company's turnaround plans can materialize. But for retirees counting on the income, it may be time to evaluate attractive alternatives.

Joseph Clemens, the co-founder and owner of Wisdom Wealth Strategies, as well as an instructor for the College for Financial Planning, said investors should ask themselves: "Is GE's current expected return, factoring in price and income potential, better than other similar investments I can find right now?" 

Some of the alternatives, particularly for retirees and for retirement savers seeking high returns but who want to avoid the risk of owning a single stock, include ProShares S&P 500 Aristocrats (NOBL) - Get ProShares S&P 500 Dividend Aristocrats ETF Report , Vanguard FTSE All-World ex-US ETF (VEU) - Get Vanguard FTSE All-World ex-US Index Fund Report , and iShares MSCI Emerging Markets ETF (IEMG) - Get iShares Core MSCI Emerging Markets ETF Report .

Small Allocation

If GE represents a small allocation in your broad portfolio, Snow said it may be time to cut your losses and find a suitable replacement. "There are many sectors that have stocks trading attractive valuations," he said. "Energy is a great example of a sector that has broadly pulled back, as has communications."

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However, if you dig, Snow said, you can find great companies at attractive valuations in almost every sector. "I would encourage investors to look for companies with a long history of paying dividends. "Once a company starts paying dividends, management is reluctant to cut it, which is why GE is such big news," said Snow. (Check out Vanguard Dividend Appreciation ETF (VIG) - Get Vanguard Dividend Appreciation ETF Report , which seeks to track the performance of the Dividend Achievers Select Index.)

In addition, Snow said he likes to look for consistent (and growing) free cash flows. "It is tempting to look at earnings per share or net income, but neither are good proxies for cash flows as they both can be manipulated through different accounting methods," said Snow. (Two examples that might fit the bill include Pacer US Cash Cows 100 ETF (CALF) - Get Pacer US Small Cap Cash Cows 100 ETF Report and Pacer Global Cash Cows Dividend ETF (GCOW) - Get Pacer Global Cash Cows Dividend ETF Report .)

Snow also suggested looking for companies that have a reasonable payout ratio. "If a company is using too much of its free cash to pay a dividend, that leaves little cash for investing in future growth," he said.

Large Allocation

If GE represents a larger portion of a portfolio, perhaps for a long-time employee that accumulated stock through the years, Snow said the plan of action is not as clear.

Replacing the lost income may be difficult, but not impossible, said Snow. "If an investor wanted to exchange their position in GE for stock in another company, that is dollar for dollar, they would need to find a stock with a current yield of 5.39% -- over twice GE's expected yield -- to fully replace the income they received from GE over the trailing 12 months," he said. "There are quality companies out there that have a yield over 5% if you are willing to roll up your sleeves and look."

Another area for investors to consider is preferred stock, said Snow. "Preferred stocks usually have a higher yield than the common stock or bonds of a company, and are less volatile than the common shares due to their position in the capital structure," he said.

For instance, two of the largest preferred stock exchange-traded funds (measured by assets) currently have a 5.33% (iShares U.S. Preferred Stock ETF (PFF) - Get iShares Preferred & Income Securities ETF Report ) and a 5.74% (PowerShares Preferred Portfolio (PGX) - Get Invesco Preferred ETF Report ) yield.

And although it doesn't necessarily help, Snow said he'd encourage shareholders to focus not so much on GE's yield, but what he would call the basis yield: current dividend payments divided by what you paid for the stock. "For long-time shareholders, the basis yield may be much higher than the current yield," he said. "Although it doesn't change the situation, it may take the sting out of it knowing you have done well through the years."

"A prudent strategy is to diversify your investments," Snow said. "Any position worth more than 5% of your portfolio would be considered concentrated, and you could reduce risk by adding additional investments in diverse sectors."

Fair Representation

A good rule of thumb that he follows with his clients is that no position should represent a higher allocation than what you receive in the form of income from your portfolio. "If your portfolio is yielding 4%, you wouldn't want one stock to represent more than 4% of your portfolio," Snow said. "Following this strategy means that if something happens to the dividend of a company -- a dividend cut or an acquisition -- it won't have a devastating impact on your cash flow."

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