It is no secret that General Electric (NYSE:GE) stock has had a rough stretch over the past five years.
Share prices steadily walked down for two straight years.
GE’s market capitalization essentially halved in 2017 and then did the exact same in 2018. That took share prices from $30 in late 2016, to below $7 by late 2018.
GE hired its current CEO, Larry Culp, at that time. He slashed debt and sold off under-performing assets.
He was credited with turning the company around to a degree. The pandemic then dealt GE and most every other business a major blow just as it looked to be getting back on track.
GE Stock and Renewable Energy
Now GE is looking toward a future marked by changing energy demands. The success of GE will be highly dependent on renewable energy.
Investors will learn more about GE’s Q2 earnings after this article is written. So, let’s look at the company’s impressive headway in becoming a greener energy company.
GE is known as a massive conglomerate with Capital, Power, Healthcare, and Aviation subsidiaries among others. GE Aviation garners a lot of press these days given how much it was affected by the pandemic.
Concerns are warranted. But at the same time, there are positive stories emerging from GE’s Renewable Energy subsidiary.
Now may very well be the time for it to emerge as a star performer among the conglomerate’s businesses.
GE Renewable Energy recently has released a spate of news which about its wind turbine blade manufacturing milestones.
In June Renewable Energy announced that its turbine blade manufacturing site in Turkey had produced its 1,111th blade.
Then, two weeks later the company announced a much larger milestone within its India division. Two Indian factories manufactured their 44,444th turbine blade.
Backlog Indicates Massive Demand
GE has the most powerful turbine in operation currently and also has a backlog of orders scheduled to provide 5.7 gigawatts of power.
In 2015, the United States had 74 gigawatts of installed capacity. So, that backlog of 5.7 GW of wind turbine power orders is quite significant.
It is clear that General Electric has invested heavily in wind as a power source and that growth is present. Another way of understanding how big that backlog is is to understand that 10,000 wind turbine blades can produce 6 gigawatts according to GE.
GE is expanding its wind power production capacity in North America as well. It is investing in Quebec to increase the capacity of an existing wind turbine factory there.
We can get some idea of the company’s backlog and commitment to wind energy in understanding that the Quebec factory has produced 10,000 turbine blades since opening in 2005.
So, if that factory produced the same number of blades it would take about 15 years to fulfill that backlog.
Although I’ve only talked about wind power, it is only one portion of GE’s Renewable Energy business. The company’s other renewable energy efforts also feature hydro energy as well as hybrid energy storage initiatives.
Takeaway on GE Stock
GE is looking to the future as it shifts from a more traditional company of yesteryear. The transition is not going to be a quick one, but watch to see how it’s handled in upcoming earnings reports and presentations.
As the pandemic wanes its Aviation business should return, but its Renewable Energy business will be equally important to its future.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
