Since legendaryGeneral Electric (
) CEO Jack Welch retired in September 2001, the S&P 500 has
And GE's stock? Sans Welch, it fell 33%.
Perhaps tired of the comparisons, current CEO Jeffrey Immelt
said at a Financial Times event in 2009 (when the comparison was
worse) that "not only could anyone have run GE in the 1990s, his
dog could have run GE, a German shepherd could have run GE."
If so, a German shepherd may be running the current show.
General Electric's earnings are starting to look the best they
have in years. The stock is up 177% since March 2009 vs. 150% for
the S&P 500.
The Street expects EPS to grow 16% this year, which would be a
little better than the average 15% earnings growth in the last
four full years under Welch.
In the second quarter, analysts estimate that EPS will jump
22%, which would be the fastest growth in 13 quarters.
Revenue, though, has yet to increase significantly, partly
because of a sluggish economy. The Street estimates that GE
revenue will grow 3.4% in Q2 and 2% for the full year.
At a conference call in April, Immelt said that U.S. business
is improving and GE is starting to see stabilization in Europe.
"We see the pipeline building, so we feel good about growth
during the year," he said.
GE's quarterly dividend is 22 cents a share, which provides an
annualized yield of 3.3% -- well above the S&P 500's 1.94%
Income investors holding
took a hit in 2009, when the company slashed the dividend from 31
cents a share to 10 cents a share. The cut was GE's first since
Recently, GE made a bid to buy the power generation and
transmission units of Alstrom, a French company. The move, if
completed, is expected to help GE's growth in China and emerging
In the past nine months, funds have lightened their exposure
to GE about 4%.