Dow Dividend Stocks #4: General Electric
General Electric (GE) has one of the best comeback stories among dividend stocks.
Many dividend investors sold off their shares of GE as it bottomed out and cut back its payout at the height of the financial crisis. But if you bought in back then, when the company reduced its quarterly dividend to just ten cents, you’re sitting on a triple-digit total return that includes $2.86 in dividend income per share.
GE met earnings estimates in its latest report, but failed to provide a rosy enough outlook to prevent some selling. The company reported net income that rose 5% to $4.2 billion, or 41 cents per share, on revenue of $40.4 billion — up 3% over the same quarter last year. Earnings per share came in at 53 cents, which was in line with analyst estimates.
On the other hand, full-year profit margins for GE’s units producing jet engines, medical devices and locomotives expanded by 66 basis points — less than the 70-basis-point goal CEO Jeffrey Immelt set in late 2012, which he reiterated last month.
GE stock is down about 8% since the news broke, giving up most of the gains it made in December, but also providing for a great entry point. GE still sports a yield of 3.5%, and should bounce back into the good graces of investors as of one of Wall Street’s best dividend stocks.