General Electric (GE) Boosts Dividend 40% in 2010, More Could Be Coming
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Price: $159.19 -2.11%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 0.7%
EPS Growth %: +203.7%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 0.7%
EPS Growth %: +203.7%
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General Electric (NYSE: GE) today announced an increase in their quarterly dividend by 16.7% from $0.12 to $0.14. At current shares prices, the annualized yield on the dividend is 3.2%.
The announcement is the second time this year the the mega conglomerate has increased their payout to shareholders. The last time the dividend was raised was in July, when the Board kicked up the dividend 20% to $0.12.
In numbers terms, they're both a two-cent increase. It may not seem like much, but with 10,654,718,000 common shares outstanding, that two-cents amounts to an additional $213 million leaving the company.
Commenting on the hike, outgoing CEO Jeffrey Immelt credited "continued strong cash generation, accelerated recovery at GE Capital and solid underlying performance in our Industrial businesses through year-end 2010."
Amid the increase, dividends are still a far cry from what they were before GE cut their rate in June of 2009. At that time, the quarterly dividend was $0.31, a 121% premium to today's increase.
The last time that GE paid a $0.14 dividend (or something even close) was October 2000, at a rate of $0.1367.
Notably, earlier in the week, Goldman Sachs put out a research report that hinted GE might just give investors a gift before the end of the year. Goldman, however, was expecting a more robust
dividend increase, in the realm of 30% or more, within the next six-to-none months.
With the previous dividend at $0.12, this might mean a potential further increase of one-to-two more cents.
Goldman's call may have to wait though, as GE generally increases their dividend only once per year. The dividend also seems to be in-line with the current price of the shares. Looking back, when GE paid a $0.31 dividend through mid-2009, shares were trading in the $30s, amounting to a yield of 3.5% - 4.5%, depending on the day.
Still, a boost to $0.15 or even $0.16 may provide enough investor confidence to drive the shares, and overall market cap, higher.
The announcement is the second time this year the the mega conglomerate has increased their payout to shareholders. The last time the dividend was raised was in July, when the Board kicked up the dividend 20% to $0.12.
In numbers terms, they're both a two-cent increase. It may not seem like much, but with 10,654,718,000 common shares outstanding, that two-cents amounts to an additional $213 million leaving the company.
Commenting on the hike, outgoing CEO Jeffrey Immelt credited "continued strong cash generation, accelerated recovery at GE Capital and solid underlying performance in our Industrial businesses through year-end 2010."
Amid the increase, dividends are still a far cry from what they were before GE cut their rate in June of 2009. At that time, the quarterly dividend was $0.31, a 121% premium to today's increase.
The last time that GE paid a $0.14 dividend (or something even close) was October 2000, at a rate of $0.1367.
Notably, earlier in the week, Goldman Sachs put out a research report that hinted GE might just give investors a gift before the end of the year. Goldman, however, was expecting a more robust
dividend increase, in the realm of 30% or more, within the next six-to-none months.
With the previous dividend at $0.12, this might mean a potential further increase of one-to-two more cents.
Goldman's call may have to wait though, as GE generally increases their dividend only once per year. The dividend also seems to be in-line with the current price of the shares. Looking back, when GE paid a $0.31 dividend through mid-2009, shares were trading in the $30s, amounting to a yield of 3.5% - 4.5%, depending on the day.
Still, a boost to $0.15 or even $0.16 may provide enough investor confidence to drive the shares, and overall market cap, higher.
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