Many of you who have been following me will realize that I’m not the biggest fan of General Electric Company (NYSE:GE). This has absolutely nothing to do with GE as a company, or GE stock as a strategic investment. InvestorPlace contributor Aaron Levitt late last year presented an excellent presentation of why you should buy General Electric. It’s so much more than just its legacy business of home goods and appliances.
When you think about it, GE stock is one of the most diverse investments you can make. It’s part manufacturer, part oil giant and essentially, a full-time technology firm.
You’ve seen their commercials — General Electric has undergone a fresh, relevant renovation. And of course to the value folks, who can overlook the dividends? As Levitt points out, “GE recently upped its payout and has now increased its dividend 2,300% since cutting it during the recession.”
This is beautiful and so utterly boring. Don’t get me wrong — boring is good, depending upon your objective. If I’m sitting on a billion dollar trust fund and I absolutely had to pick a publicly traded security, I’d go with GE stock.
Rough Start for General Electric Stock
At the same time, there is an exciting way to do boring. I’d argue that AT&T Inc. (NYSE:T) is a prime example with its Taylor Swift partnership. And let’s face it — Walt Disney Co (NYSE:DIS) was a snoozer prior to their Star Wars acquisition.
I love the exposure to industrial technologies that GE stock provides. However, that’s a category that takes a major leap backwards compared to sex appeal and light sabers.
The problem now is that Wall Street is taking notice. For a supposedly stable investment, GE stock isn’t getting off to the best start. Year-to-date, General Electric shares are down roughly 4%. Clearly, the Donald Trump effect has faded. At its peak, GE stock gained nearly 10% from the surprise election result. Now, shares are up less than 2%. Like I said, it’s incredibly boring.
The optics are terrible too. As we all know, the Dow Jones Industrial Average is above 20,000 points. Logically speaking, that means a majority of the Dow 30 companies are doing well. In fact, data from CNN Money reveals that 21 of the 30 are in the black YTD. That’s a cool 70% even. Yet disturbingly, the vaunted GE stock is a dud this year. Only Verizon Communications Inc. (NYSE:VZ) and Exxon Mobil Corporation (NYSE:XOM) are worse.
The issue of course is that GE stock is the worst of two worlds. It’s not holding pace under supposedly favorable circumstances. Also, at 28 out of 30, General Electric is not protecting shareholders from volatility. Should investors be worried?