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Dividend Increase: GE On Tap To Bring Good Things To Investors
- GE should increase its dividend in December.
- Expect $1.00/share, representing a yield of 3.7%.
- The combination of moderate valuation and healthy dividend make GE a Buy,.
GE Sees Strong Returns On Its Industrial Internet Investments
- For its 3rd quarter of the fiscal year 2014, GE reported revenues of $36.2 billion, up by a slim margin of 1% from $35.7 billion in Q3 2013.
- Net income for GE amounted to $3.5 billion including the effect of discontinued operations. Net income grew 9% from $3.2 billion in the year ago quarter.
- GE set a goal to reach 4-7% growth in fiscal year 2014 in organic terms from its industrial segment, reaching the lower end of that mark during the 3rd quarter.
- GE is planning a $32 million investment in the construction of an advanced manufacturing unit in Findlay in the hope of developing and implementing innovative technologies in production.
- General Electric recently gained formal approval from the French government for the $13.5 billion acquisition of the energy business of premier French power and transportation company Alstom.
- Many investors feel GE is moving at a snail's pace in steering the company to success.
- CEO Jeff Immelt seems to be following through with his plan to wind down GE Capital and grow the Industrial Division.
- A look at before and after the Financial Crisis: How does GE compare?
General Electric Capital Corporation: The 171st Best Bond Investment
- General Electric Company subsidiary GECC was the most heavily traded bond issuer in the U.S. corporate bond market on November 17, 2014.
- We compare the credit spread to default probability ratios of GECC with all other heavily traded bond issuers in the U.S. corporate bond market.
- The best GECC bond issue ranked 171st of the 254 bond issues that traded at least $5 million on November 17, 2014.
- GE has become of those names that you hold in the portfolio and let the dividends ride.
- The company recently received a contract from Petronas for some turbo-machinery to be used on a floating LNG facility.
- CEO Jeff Immelt will receive a batch of performance share units if he hits certain milestones pertaining to cash balances and operating margins.
- GE is eight companies operating under one company. This article attempts to assign a value to each of those companies.
- This article calculates each segment's value by creating an average P/E ratio from the competition.
- This article shows that GE is fairly valued, or slightly undervalued based on the sum of all the parts.
General Electric: A Golden Total Return Opportunity Is Never Offered Twice
- General Electric currently offers income investors a safe long-term investment. The company has a fortress balance sheet and strong cash flow.
- The planned transformation of the company into an industrial powerhouse is expected to reward investors with capital gains and dividend growth. This makes the stock an excellent total return investment.
- Furthermore, the stock appears undervalued on a relative basis and has several positive catalysts on the horizon. In the following article I will lay out my case.
- GE recently released the CEO's newest incentives.
- The package rewards the CEO and other executives for maintaining a strong cash position and improving operating margins.
- These goals are both served by divesting under performing businesses and showcases GE's next strategic moves.
General Electric's Disappointing Performance Likely To Continue
- General Electric's shares have lagged the market over the last 12 months and they now trade at less than 15 times forward earnings.
- However, despite the relatively low valuation and impressive dividend yield, there are warning signs, such as a disappointing return on invested capital and a highly leveraged balance sheet.
- When the above factors are combined with a projected earnings growth outlook that is only modest, the result is that General Electric shares appear significantly overvalued.
General Electric's CEO Jeff Immelt Is On Easy Street
- General Electric's board recently announced an incentive bonus plan to motivate CEO Jeff Immelt to perform his job.
- Convertible units and options combined could total $18.4 M or possibly more, depending on how GE common shares perform through 2016.
- Immelt has already nearly achieved the level 1 margin threshold requirement.
- GE shares remain undervalued by several valuation measures.
- Sales backlog has reached a record $250B and continues to grow.
- Margin expansion from restructuring efforts is progressing as planned.
- Restructuring is progressing well with key divestitures and acquisitions.
- I don't think so. The stock has had a tremendous run in the past month along with the rest of the market and I want to let it breathe.
- The company however does have a great dividend and increased ROA and ROE from last quarter but I don't think the dividend can grow much more right now.
- Though the stock has run up quite a bit in the past month, I still believe it is undervalued based on 2015 earnings estimates.
- Economic value added (EVA) analysis looks at the profits accruing to the shareholders after subtracting the cost of capital.
- My Analysis shows that GE has been an erratic creator of Economic Value (EV) over the last 15 years. GE destroyed value in 8 of the last 15 years.
- As GE shrinks its balance sheet and goes back to its industrial roots, it is beginning to create increasing EV however it may also become more cyclical.
- The company is sticking to its guns and reducing its exposure to the finance segment of the product portfolio by announcing that it'll sell its stake in Korean JV.
- Alstom deal is due to be completed by the middle of 2015.
- The stock is boring, but pays a great dividend.
General Electric's Debt No Longer Enticing But The Common Looks Good
- When I first profiled GEK the notes were trading at a significant discount to their issue price.
- The notes have moved up more than 20% since my buy call and have become too expensive to continue to hold.
- I prefer GE common shares to GEK at this point for dividend growth and relative value.
General Electric: 2015 Industrial Internet Opportunity Looms Large
- General Electric’s Industrial Internet program added $1 billion in incremental revenue in 2014.
- General Electric believes the combination of networks and machines could add $10 to $15 trillion to Global GDP over the next 20 years.
- The size of this opportunity is staggering for General Electric based on the size of its services business.
- The news outlining this opportunity fell on deaf ears recently. This has created a major buying opportunity for dividend investors.
General Electric: Aviation Division Will Power Stock Higher
- General Electric’s Aviation Division contributed greatly to the company’s earnings growth this past quarter.
- The Aviation Division led the way with $6.8 billion in equipment orders and 3.3 billion in services in the third quarter.
- There are no signs of the division slowing down anytime soon either with an 8% CAGR. The company continues to innovate creating new opportunities for growth.
- Despite being a very mature and well-diversified company, GE remains highly efficient.
- It continues to offer strong returns and excellent profitability, as well as an improving financial standing.
- With an attractive valuation and relatively strong growth prospects, we think that GE remains a top notch investment.
General Electric: The Next Big Thing In Naval Warfare?
- I have written a series of articles recently regarding General Electric’s focus on the future.
- In this article I will discuss another gem I uncovered while researching the company further.
- I believe this effort will support the company’s prospects for growth going forward.
- Now may be just the time to buy for savvy dividend investors.
- As the macroeconomic climate continues to improve, GE's share price will be impacted.
- The Neural Macroeconomic Model (NMEM) was developed to forecast share price based on the macroeconomic climate.
- The NMEM forecasts a 70% chance of GE's share price reaching $30 before the end of November 2014.
- The NMEM is trained to mimic the behavior of other of market participants and should be used as a balancing point in an investor's bottom-up analysis.
Thu, Nov. 20, 4:08 PM
- The business owns and operates more than 200 residential properties consisting of more than 10K units. Blackstone (NYSE:BX) is paying just north of ¥190B (about $1.6B).
- GE Capital Real Estate has global assets of $36B, and the Asia-Pacific unit has $5.1B.
- Francois Trausch, CEO – Asia-Pacific at GE Capital Real Estate: “This transaction supports our global strategy to reduce our equity book as we continue to build our global debt operations."
- Source: Press release
Thu, Nov. 20, 7:17 AM
- General Electric (NYSE:GE) is looking to expand its wind-power business globally while providing services such as data analytics to improve turbine performance. The conglomerate plans to have a presence with its wind turbine business in 35 or more countries next year, up from eight in 2003.
- Anne McEntee, CEO of GE's renewable energy business, points to the importance of diversifying into different countries to take advantage of where energy demand and policy are encouraging.
- GE does not disclose revenue for its wind business, which is part of its Power & Water segment, but it ranked as the world's fifth-biggest wind-turbine supplier last year according to Navigant Research.
Tue, Nov. 18, 6:48 PM
- Halliburton’s (NYSE:HAL) $34.6B buyout of Baker Hughes (NYSE:BHI) has caused HAL shares to plunge 12% since the deal was announced Monday, the worst two-day performance for an acquirer’s stock this year; on average, a company announcing a deal has seen its stock pop 3.1% on the news.
- But analysts say the deal may present game-changing opportunities for a few small and mid-cap oilfield services firms with enough cash on hand to buy a chunk of HAL's expected divestments without diluting their stock or damaging their credit rating.
- Tudor Pickering Holt's Jeff Tillery speculates that Forum Energy Technologies (NYSE:FET), National Oilwell Varco (NYSE:NOV) and GE would be interested in HAL's manufacturing businesses that may come up for bid, while Superior Energy Services (NYSE:SPN) and Frank's International (NYSE:FI) might want certain services-oriented businesses.
- Weatherford (NYSE:WFT) would seem like a logical buyer of some assets and could make it happen with a mix of cash and stock, but RBC's Kurt Hallead thinks HAL might not want to cooperate with a company that could essentially become what Baker Hughes was.
Mon, Nov. 17, 3:59 PM
- In the wake of Halliburton's (NYSE:HAL) $34.6B offer for Baker Hughes (NYSE:BHI), it appears the next hot sector for M&A action is energy: More consolidation is likely, given the weakness for stocks in the oilfield services subsector, low interest rates, and as a drop in demand for oil increases cutthroat pricing competition.
- Speculation is running rampant as investors try to figure out who is next in an industry that is sure to undergo some more consolidation; some names identified as possible candidates include Kodiak Oil and Gas (NYSE:KOG), Marathon Oil (NYSE:MRO), Northern Oil and Gas (NYSEMKT:NOG), Anadarko Petroleum (NYSE:APC), Pioneer Natural Resources (NYSE:PXD).
- GE could go after National Oilwell Varco (NYSE:NOV) to show it is serious about the energy industry after last year’s purchase of pumpmaker Lufkin, Royal Bank of Canada says, and Oppenheimer says even BP could be an acquisition candidate.
- But Morgan Stanley does not see offshore drillers getting in on the action, as larger players like Diamond Offshore (NYSE:DO), Transocean (NYSE:RIG) and Seadrill (NYSE:SDRL) are still addressing dividend concerns while smaller companies such as Atwood Oceanics (NYSE:ATW) and Pacific Drilling (NYSE:PACD) still trade close to replacement value.
Mon, Nov. 17, 12:21 PM
- GE's (GE +0.6%) China head says she expects the company to continue posting double-digit order growth in the country despite a slowing economy and a government anti-corruption campaign that has delayed approvals for large-scale projects.
- While GE is seeing delays on some projects it is bidding for in China, particularly in the energy and health care sector, it foresees only a short-term impact on its operations, says Rachel Duan, who became GE's chief executive for greater China in July.
- China's government is "trading the speed of growth for the quality of growth, shifting to more consumer-oriented growth," Duan says.
Thu, Nov. 13, 6:56 AM
- General Electric (NYSE:GE) expects developing markets to be a "huge engine" of growth due to their demand for the company's infrastructure products.
- "We should continue to grow at double-digit rates in those growth markets, even with a global economy that's kind of inching along," says John Rice, vice chairman and president of GE's global growth organization. "We think that there is still a significant pent-up demand for infrastructure."
- With its recent Alstom acquisition and sale of its appliance business, GE is shifting more toward industrial operations while shrinking its finance business and shedding non-core units.
Wed, Nov. 12, 3:18 PM
- GE Oil & Gas (GE +0.4%) says it has won a contract from Malaysia's Petronas to supply a gas turbine-driven compressor train and mechanical drive technology for a second floating liquefied natural gas facility.
- GE says it is the first time an LM6000 gas turbine, already used for offshore mechanical drive applications, will be applied to an FLNG project; financial terms were not disclosed.
- The project, which will collect supplies from small offshore gas fields that lack access to onshore pipelines, is expected to start up in Q3 2017.
- Previously, Petronas also had selected GE’s turbocompressor equipment to power its first FLNG.
Wed, Nov. 12, 11:19 AM| 13 Comments
Mon, Nov. 10, 7:11 PM
- The compensation committee of GE's board has granted CEO Jeffrey Immelt 200K "performance share units" that will convert into GE stock at the end of three years if the company reaches certain cash and operating profit margin targets over the next three years.
- According to an SEC filing, Immelt would earn half the targeted amount of PSUs if GE reaches $50B in total cash through 2016 and the full amount if it reaches $55B, while the CEO earns the other half if GE's operating margin is 16.5% by 2016 and the full amount if the margin reaches 17%.
- The company plans to provide similar incentives to other top GE executives, according to the filing.
Thu, Nov. 6, 9:13 AM
- GE (NYSE:GE) Capital has closed the sale of its GE Money Bank consumer finance business to Santander (NYSE:SAN).
- "This sale is part of our overall strategy to focus GE Capital on our commercial portfolio with a goal of becoming 25% of GE’s overall earnings," says GE Capital CEO Keith Sherin.
- Previously: Santander to acquire GE Money Bank
Wed, Nov. 5, 10:59 AM
- General Electric's (GE +0.2%) purchase of Alstom's power assets is on pace for closing in mid-2015 after passing several steps, GE's power business chief Steve Bolze tells Reuters.
- The $16.9B acquisition had encountered fierce resistance from the French government earlier this year, but Alstom says the deal has won official government clearance and support from European works councils.
- Alstom also set Dec. 19 for a shareholder vote on the transaction, while GE still needs regulatory approvals for the deal in more than 20 other countries.
- Bolze says the company is even more bullish on the deal after gaining more information about the French company and visiting sites.
Wed, Nov. 5, 2:28 AM
- Alstom (OTCPK:ALSMY) says it will convene its shareholders to a general meeting on Dec. 19 to approve the €12.4B ($15.6B) deal that will see General Electric (NYSE:GE) buy most of its power business.
- The deal has already received the green light from the French government, after the state activated the process that would allow it take a stake of up to 20% in Alstom from shareholder Bouygues (OTC:BOUYF).
- Over the medium term, Alstom expects sales to grow over 5% per year organically and its operating margin to gradually improve within a range of 5-7%.
Thu, Oct. 30, 3:52 AM
- In its latest shift away from consumer finance, General Electric (NYSE:GE) is in early-stage talks to sell its 43% stake, likely worth more than $1B, in its South Korean auto-financing and credit-card businesses.
- The sale would unwind a partnership that began a decade ago between GE and Hyundai Motor (OTC:HYMLY).
- It isn’t exactly clear how much GE will receive from the sale, but it has already received some of its original investment back through dividends.
Fri, Oct. 17, 7:11 AM
- Q3 operating earnings of $3.8B, with EPS of $0.38 up 6% from a year ago.
- Industrial segment profits up 9% to $4.3B, with margins higher by 90 basis points, and organic revenue growth of 4%. Orders up 22%. Organic revenue growth for all of 2014 is expected to be at the higher end of the 4-7% range.
- Backlog of equipment and services of $250B up $21B Y/Y.
- GE Capital non-core portfolio size of $365B slipped another $6.5B from Q2 and is off 5% Y/Y. Tier 1 common ratio up 79 basis points to 12.1%, with net interest margin of 5%. $2.2B in dividends returned to parent YTD.
- Immelt: "The environment is volatile, but infrastructure growth opportunities exist."
- Conference call at 8:30 ET
- Previously: General Electric beats by $0.01, misses on revenue
- GE +1% premarket
Fri, Oct. 17, 6:33 AM| Comment!
Thu, Oct. 16, 5:30 PM
GE vs. ETF Alternatives
General Electric Co is a diversified company with products & services that range from aircraft engines, power generation, oil & gas production equipment, & household appliances to medical imaging, business & consumer financing and industrial products.
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