Investors should buy General Electric Company (NYSE: GE) stock, as help appears to be on the way for its beleaguered Power business, while its other businesses appear to be performing quite well and it has multiple additional positive catalysts. Moreover, GE stock is fairly cheap at current levels.

Help on the Way for Power

Investors are focusing on the gloomy near-term outlook for GE’s Power business. But significant positive catalysts appear to be on the way for the unit. These catalysts may take a year or two to significantly boost GE and GE stock, but they should be worth waiting for.

China is increasing its utilization of natural gas in a  big way. According to a Forbes columnist, “this year, China’s gas demand should grow 16%-18%,” while the country’s potential as a natural gas market is “simply staggering.” Meanwhile, Reuters reported in January that China’s natural gas imports jumped more than 25% last year, while the trend should continue this year, making it the top natural gas importer in the world by the end of the year.  It makes sense that China will greatly increase its utilization of natural gas in upcoming years. Beijing is desperate to reduce the country’s debilitating pollution and natural gas is much cleaner than coal.

Boosting GE Stock

Furthermore,  renewable energy cannot be solely relied upon because the wind isn’t always blowing and the sun isn’t always out. Electricity storage systems are still quite expensive. And as Japan’s  Fukishima disaster showed, adopting nuclear energy can be quite dangerous. As a result, natural gas is a natural choice for China and other countries that are becoming wealthier but still have very dirty air. As more of these countries turn to natural gas, they will buy many more of GE’s gas turbines and other electric equipment, boosting the Power unit and GE stock.

In the past, I’ve pointed out that the Power unit could be boosted by large scale adoption of electric cars. While doing research for this column, I found more support for that theory.  The electric car revolution will enable utilities to “take billions of dollars in the transportation sector away from the fossil fuel industry,” and utilities are starting to build new infrastructure to support electric cars, Quartz reported. More money for utilities will likely mean more money for GE’s Power unit, and GE can help build the additional infrastructure for utilities.  For example, the company is building battery systems to enable utilities to store power during periods of high demand.

Moreover, NPR asserted that “the electricity industry” will have to spend “hundreds of billions of dollars” to accommodate electric cars. You can bet that GE’s Power unit will get a significant portion of that money.

Other Businesses Surging

The profits of GE’s Baker Hughes energy services unit are forecast to jump 50% this year. The unit is benefiting from $70+ oil, but it has multiple upcoming positive catalysts. These include opening up of additional areas of the U.S. to drilling and likely huge increases in the amount of U.S. energy exported to China in the wake of a trade deal between the countries.

The profits of  GE’s aviation unit are expected to rise 15%+ this year amid “market tailwinds in commercial and military.” Finally, the profits of the company’s healthcare businesses are expected to rise 5%+ this year amid “double digit growth” in emerging markets.

Other Catalysts, Valuation

GE CEO John Flannery announced on May 23 that the company was maintaining its overall earnings-per-share forecast at $1-$1.07. Since analysts’ consensus estimate for the company’s 2018 EPS currently stands at 96c, I’d say that maintaining the EPS outlook is a positive development. Furthermore, GE is looking to reduce a combined $1.36 billion of costs in 2018 and 2019. It predicts that it will end 2018 with “about $15 billion of investable cash,” according to Flannery. Finally, GE is taking steps to reduce the size of GE capital. That has been a source of risk and uncertainty for the conglomerate.

Valuation of GE Stock

Trading at a forward price to earnings ratio of 13.7, GE stock isn’t too expensive, especially considering the cash that it expects to have on its books at the end of 2018 and the positive catalysts I outlined above. Investors should definitely buy GE stock at current levels.

As of this writing, Larry Ramer did not own shares of any of the companies mentioned.