General Electric (NYSE:GE) is looking ahead and positioning itself in growing markets in hopes of ensuring a prosperous future for itself.
Furthermore, General Electric offers a strong dividend at $.68 per share, equaling a yield of about 3.54 percent. This is extremely attractive to potential investors, and I think along with the affordable stock price, historic stability, and success of this conglomerate, General Electric is an attractive buy. However, it should be noted that it is only a good investment for investors looking for stable, low-risk growth. I do not expect General Electric to jump back into the $40 per share range any time soon, and neither should you.
Another attractive piece of General Electric is its commitment to expanding medical instruments and the field of health care. At the 2012 Annual Meeting of the American Society of Clinical Oncology (ASCO), which takes place in early June, General Electric will showcase innovative oncology solutions for health care practitioners. These innovations, which focus on breast cancer solutions, and General Electric's medical diagnostics products help in understanding cancer from the beginning stages.
Lastly, the showcase includes equipment that "delivers the information clinicians need to make critical decisions" according to Pascale Wintz, CEO of General Electric Healthcare Medical Diagnostics. It seems that this new equipments will get accurate information in a timely manner to doctors, and therefore to the patients, to make good decisions and understand the disease.
Not only is General Electric invested in improving the field of health care, but it is also invested in the emerging markets of Asia, Africa, and South America. It has embarked upon new investments or campaigns in India, Brazil, and Kenya, just to name a few.
In India, a new brand campaign, with the title 'GE Works,' uses local art forms to advertise. General Electric has partnered with indigenous artists, so the company can use a range of art forms like Soura Art, or Kalamkari Art in its advertisements. In my opinion, this advertising campaign has the potential to be very valuable for General Electric. It can help the American company become more popular in the Indian culture, and hopefully result in a firmer market position in Asia - leading to increased future revenues.
General Electric has entered an investment agreement with Brazil's EBX group to further its investments in industrial, mostly oil and gas projects, development in Brazil. Brazil is a market with a vastly growing population, along with room for further economic growth. This increased investment helps General Electric increase its stake in international markets, and strengthens its relationship with Brazil.
General Electric's CEO of Latin America stated, "Once again, General Electric made an innovative move focused on growth opportunities in Brazil." This claim shows the dedication of General Electric to investment in South American markets. These increased investments should also lead to increased revenues, which should be good for shareholders.
General Electric demonstrated its devotion to not only building up its position in foreign markets for profit's sake, but also to assist further development in these markets. The equipment manufacturer is partnering with Kenya's Vision 2030 to further develop transportation facilities, health care, and improve training for engineers and technicians.
Vision 2030's goal is to "create a globally competitive and prosperous nation with a high quality of life by 2030." Many of General Electric's plans in helping Vision 2030 are still being conceptualized, however they are moving ahead on an arrangement to develop two large wind farms, and refurbish rail locomotives along with Rift Valley Railways.
This partnership creates value to General Electric and its shareholders by positioning itself in the growing market of Kenya, and by creating huge social value for the struggling country.
Looking at General Electric's competitors, there are no companies that seem able to challenge General Electric's market position and stability. Siemen's (SI) may be the closest competitor of all, as the company has fared well recently. It also announced it would be investing up to $1 billion in Brazil by the year 2017, in hopes that the emerging market will provide profit for the future beyond that date.
The Japanese electronics company Hitachi is a conglomerate with eleven segments, which is also taking measures to expand internationally. It has recently taken over Malaysian IT firm EBworx. This financial IT solutions company has a large customer base, mostly with major banks in Malaysia and Singapore. Hitachi is expanding for the purpose of targeting the business of financial institutions that are focusing on investments in Southeast Asia.
Another major competitor of General Electric is the diversified technology company 3M (NYSE:MMM), which has presence in many of the same fields of service as General Electric. 3M looks like another attractive company to invest in for many of the same reasons as General Electric. 3M's ability to increase its dividend year after year, due to its healthy amount of free cash flow, and its successful comeback after the recent recession makes it a good buy for investors. However, I do not believe 3M's success will hurt General Electric, and I think they are both decent stocks for one's portfolio.
Competitor Honeywell International (NYSE:HON) has kept out of GE's way as its focused most of its energy on the auto industry. With gas prices rising, Honeywell has taken advantage of the climate and plans to put out 1 million "turbocharged" cars this year. The cars are more fuel-efficient than your average automobile and the company has delightfully seen a solid increase in the users of its line of cars. The major American automakers use Honeywell's technology in at least one of their cars.
A competitor of General Electric in the medical field is Medtronic (NYSE:MDT). Since Medtronic only operates in one segment, there is naturally more risk in this stock than in a conglomerate like General Electric. For the same reason, Medtronic only has the ability to compete with General Electric's medical segment - though it appears to be doing at least some things right. It just won approval from the FDA for a new drug helping combat diabetes. It also, as one analyst points out, stands to benefit quite a bit should ObamaCare survive its supreme court trial and go into effect nationwide.
Overall, I see General Electric as a good stock to own, with a healthy amount of stability and long-term growth. It is successfully expanding into growing markets, which will lead to future growth in revenues and stock price. Furthermore, while there are a good number of successful competitors, I do not think any of them will damage General Electric stock enough to concern shareholders - furthering my position that it is a good investment.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.