General Electric (NYSE:GE) is often referred to as the barometer of the economy. GE has been on the move lately, with the invention of the Serial FPDP and the signing of a contract with ATP Oil & Gas (ATPG). In this article, I will focus on GE and how this powerhouse is managing to stay on top of its competitors by positioning itself for growth. Additionally, I will compare three other tech stocks to get a better sense of current market conditions.
General Electric has widened its competitive moat in the international market through its diversified operations and product innovation. The company has made notable progress in terms of revenue growth and has expanded its share in the global market by targeting new profitable opportunities in emerging markets.
A string of smart investment decisions, a series of recent technological innovations and signing of new lucrative contracts have greatly contributed towards the stock's impressive run in the current fiscal quarter. For instance, General Electric has recently invented the Serial FPDP, a state-of-the-art high-speed data transfer module that offers an amazing total bandwidth of 1.4 Gbps. The commercial as well as military applications of this revolutionary technology are tremendous and should allow the business to enjoy greater revenues and higher cash flows.
General Electric is also aggressively campaigning on making itself a more marketable brand in the Americas. The company recently launched the Electric Odyssey Tour in Plainville, Connecticut with the aim of strengthening its relationship with its customers by providing them with innovative solutions directly at their doorstep. Scheduled to cover more than 200 sites in more than 80 cities, the six-month tour is aimed at helping the company in significantly widening its competitive moat in the American and Canadian market through the building of strong customer relationships.
General Electric has also expressed its interest in investing nearly $65 million in Dayton's Aerospace Corridor. The new research and development facility will be the intellectual center of the company's electrical power business, employing nearly 200 researchers from across the nation. General Electric has also been contracted to supply five gas turbines, three steam turbines and five heat recovery steam generators for the $34 billion Ichthys LNG Project in Australia.
General Electric's gas and steam technology will increase the efficiency and reliability of electricity generation at the onshore facility situated at Blaydin Point, Darwin. This should help the company in generating additional revenues. The company has also signed an $80 million contract from ATP Oil & Gas for the Cheviot Oilfield Project in the North Sea. The company will provide ATP Oil & Gas UK with ancillary systems and subsea production equipment. All these recent positive developments should help the stock in maintaining its upward drive in the stock market.
Even in terms of capital, I consider General Electric to be a relatively stable and safe investment option. The company has a staggering market capitalization that easily exceeds $207 billion while average trading volume is more than 44 million. Price to earnings ratio of 16.08 is really impressive when judged by industry standards and the company pays its investors $0.17 in dividends on earnings per share of $1.23. General Electric has a healthy dividend history with an impressive yield of almost 3.5%. Therefore, according to my analysis of the leading financial indicators of the business, GE has a positive outlook with a strong position in the market and is poised for steady growth in the current financial year.
A brief review of the leading financial indicators of major competitors of General Electric will further help us in understanding the positive outlook for the stock. Based on this competitor analysis, decision-making for potential and existing stockholders will become easier as they will be able to compare all the options.
Siemens AG (SI) is among the leading direct competitors of GE in the international electronics market. It has performed exceptionally well over the years and has offered steady returns and earnings to its investors. Its growth trends have always attracted potential stockholders because of its stable operational and financial outlook.
In the recent Siemens AG Capital Market Day organized in London, leading financial analysts highlighted the company's impressive performance in the first fiscal quarter of this financial year. In addition, the company's plans for 2013 were also discussed in detail, particularly regarding new innovations in the healthcare sector. Siemens is determined to devise extensive plans and strategies in order to increase its share in the global market while also helping it in widening its competitive moat and generating greater returns. In the last year alone, Siemens has recorded an impressive income growth of a 67% while sales and revenues have also grown significantly.
Philips Electronics (NYSE:PHG) is another competitor worth mentioning here as it too has a strong position in the international market. Over the years, this company has built a strong reputation for itself based on the yields and earnings that it offers to investors. According to the latest financial updates, Philips has reported an 80% growth in profits in the first fiscal quarter of this financial year compared to the previous year's figures.
This goes to show that Philips will still manage to attract a large number of investors who are looking for better returns. The risk factor associated with this investment is not very high either meaning that the stock is generally a very stable and safe investment option. However, it does have the potential to offer better returns than the market average in case the economic conditions improve further.
United Technologies (NYSE:UTX) offers lower dividends with lower earnings per share as compared to its competitors. The company is not as well established as GE or Siemens but has performed well, which is why it became popular in the stock market. However, the stock has largely failed to appeal to those investors who are looking for higher returns and earnings with significant capital gains.
In addition to this, a recent announcement by financial experts has suggested that GE has an upside of 25%, comfortably overshadowing competitors like United Technologies. After conducting this analysis, I am convinced that GE has a much better outlook than most of its competitors. Even with all the different options available, it still seems to be the best option available for investors who are looking for higher returns and earnings.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.