Personal Finance
GE

Will GE Cut Its Dividend?

General Electric 's (NYSE: GE) new CEO is determined to make major changes to the company, and he's been quoted as saying that nothing is sacrosanct.

In this clip from the Industry Focus: Energy podcast, host Sarah Priestley is joined by Fool contributor Sean O'Reilly to discuss what we know so far about GE's dividend, whether it might get cut, and how that would affect the company in the short and long term.

A full transcript follows the video.

10 stocks we like better than General Electric

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and General Electric wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 6, 2017

This video was recorded on Nov. 2, 2017.

Sarah Priestley: He seems very much investor focused. He actually said he had a history of focusing on what the investor wants. However, a lot of investors believe the stock is a blue chip, safe 4.5% dividend yield.

Sean O'Reilly: Founded by Thomas Edison!

Priestley: Exactly, a 125-year-old business. And it's likely, I believe, that they're going to cut that dividend.

O'Reilly: Yeah, I was reading on the way in, forgive me, I think Jeremy Bowman at The Fool wrote it, but he pointed out that in the conference call, what did he say, they have to balance the dividend with their growth initiatives.

Priestley: Yeah, and I think that's sensible.

O'Reilly: For sure. But, if your dividends guy, I mean, everyone went nuts. The stock fell 13%.

Priestley: Yeah. It's the worst performance since the Great Recession in one week.

O'Reilly: [groans] And they had the Finance arm then. [laughs]

Priestley: It's not as terrible as people think, because they have a lot of cash on hand. They could finance this. The thing is, there's such a change in attitude. Jeff Immelt said dividend was sacrosanct. He said cutting it in 2009 was the worst day of his tenure. Yet, Flannery has come in and said, there are no sacred cows. Capital allocation is an emotionless decision. As you said --

O'Reilly: Which is awesome. Anybody who says that, you want.

Priestley: Exactly. When you get companies this big, this mature and hard to grow, I think you need somebody to come in and make the tough choices.

O'Reilly: Right, like getting rid of all those jets and cars and stuff.

Priestley: Yeah, exactly. So, we're going to hear about the potential with the dividend on the November 13th meeting.

Sarah Priestley owns shares of General Electric. Sean O'Reilly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GE

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More