Hey everyone, so summer is almost over and I will get back to my normal writing frequency of at least two articles per week. Today I am talking about of probably one of the best dividend companies, General Electric. GE has paid a dividend for over 100 years and has increased its dividend annually since 2011. Due to do financial crisis GE had to cut its dividend from 1.24 USD to 0.42 USD in 2010, currently, it offers a dividend of 0.96 USD. But let’s have a look if General Electric is currently worth an investment.
Company Overview
General Electric Company (GE) is a diversified technology and financial services company. The company offers many products and services including aircraft engines, power generation, water processing, household appliances, medical imaging, business and consumer financing, and industrial products. GE has a presence in over 100 countries. Segments of the company include Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions and GE Capital. General Electric was founded in 1892.
Stock analysis
Currently, GE is priced at 24.28 USD per share, which is 24.6% below its 5 year high of 32.20 USD in August last year. I think you can easily see in the drop of the share that the company was and still is in a restructuring phase, but I also think the drop is an overreaction of the market. Based on the current key ratios,
it is hard to say that GE is a buy currently especially when you also look at the payout ratio of more than 100%, every analyst would say no. But due to the fact that GE is at the end of its transition phase and when looking at the forward valuation, I would say GE would be a good investment at its current price. The forward P/E ratio according to Morningstar is at 15.4, which is way below the 5-year average and also in line with the P/E ratio before the financial crisis.
