GE consumer credit spinoff could boost multiple


GE's North American retail credit unit is primarily a consumer credit card business and accounted for $9.4B of GE Capital's $44B in revenue in 2013 (GE overall had $146B in revenue). So while it's relatively small, the spinoff (with new name Synchrony Financial SYF) will reduce exposure to the ups and downs of consumer spending, writes Dimitra Defotis in Barron's.

By becoming less of a bank - CEO Immelt hopes for GE Capital to account for one-third of earnings next year vs. 40% in 2013 - GE could fetch a higher multiple, he suggests, noting the stock trades at about 15x estimated 2014 earnings vs. a more pure-play industrial player like Danaher at 20x.

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