Tuesday, April 5, 2011

An Industrial Stock With A Solid Yield

[General Electric is offering investors a pretty solid yield and a decent yield. General Electric is one of the giant blue chips in the marketplace and an American institution. The company has its hand in just about every sector of the United States. General Electric is finally back on the right track after years of trouble.] [GE had been a dividend favorite of income investors for years until two years ago. The company cut its dividend for the first time in its history and lots of investors abandoned the stock. The 68% dividend cut was a major hit as the firm only paid out 10 cents a quarter to investors. GE recently raised its dividend back up to 14 cents a quarter. It’s a far cry from the 31 cents per quarter paid back in 2008 but it is a start.

GE has made my dividends list because of its 2.9% yield. I have been saying that the stock is attractive for awhile now and I still believe so. The current dividend payout represents just 42% of this year’s earnings and just 34% of next year’s earnings.The dividend has substantial room for growth.

I am a fan of the company’s new direction and return to its core businesses. GE Capital had become too bloated in recent years and saddled the company with lots of bad loans.  I have to give CEO Jeffrey Immelt credit. He has done a good job of slowly divesting these assets. In the past I have been a harsh critic of Immelt. I refused to buy the stock for years because GE had no growth. Those days are finally over.]

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