General Electric 2012 Preview: Is a Break-up in the Works? (GE)
General Electric Company ( GE ) is one of the most popular dividend-paying stocks of all time. Forced to cut its payout significantly amid the financial crisis of 2009, GE has once again fallen back into favor with investors. The question is, what does 2012 hold for GE?
Note: This 2012 preview for GE appears in our new 275-page eBook, Beat the Market with Dividend Stocks , which is available exclusively for Dividend.com Premium members.
The best way to evaluate dividend stocks as we look ahead to 2012 is to separate the potential catalysts from the potential concerns. These are the main factors investors should weigh as they decide whether to put their hard-earned capital in any stock.
Potential Catalysts for GE
- Company continues to inch its dividend payout back up, with two major raises in 2011 alone.
- Calls for a company break-up to unlock value could intensify if stock continues to play dead.
Potential Concerns for GE
- Company is still laboring to get back to its former glory days.
- Seeing the company slash its dividend a few years back could continue to keep some diehard dividend investors away.
The Bottom Line
We're on the fence with this huge company and its prospects for 2012. On one hand, GE's near 4% dividend yield is attractive once again, but on the other, its return to prominence is likely still a ways off. Plus, its recent profit gains have come on mostly stagnant revenue.
Still, we upgraded GE to our Best Dividend Stocks List in early December, and it's performed very well since then. Just don't chase it too much if its share price continues to rise.
General Electric Company ( GE ) is a "Recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.