Dividend Stock Wednesday: General Electric (GE)

Written by The Dividend Guy on January 23, 2008

General Electric

This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

11 Dollars Out of 14

Given that GE has been one of the few stocks that has not had dramatic drops in the past few weeks, I thought it would be good to have a look at this massive company.

The Company: General Electric Co. (GE-NYSE)

General Electric is one of the largest and most diversified industrial corporations in the world. GE is engaged in developing, manufacturing and marketing a wide variety of products for the generation, transmission, distribution, control and utilization of electricity. Some of GE’s products include major appliances; lighting products; industrial automation products; medical diagnostic imaging equipment; motors; electrical distribution and control equipment; locomotives; power generation and delivery products.

Dividend Aristocrat (25+ yrs dividend growth)
 Yes
Dividend Achiever (10+ yrs dividend growth)
 Yes

THE FUNDAMENTALS

Revenue

GE - RevenueClick to Enlarge

Revenue Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with < 2 Down Years 0.5
Choppy with > 2 Down Years 0.0
My Revenue Score 0.5

Earnings Per Share

GE - EPSClick to Enlarge

Earnings Per Share Scoring

Criteria Scoring
Consistenly Up with No Down Years 1.0
Up Trend with < 2 Down Years 0.5
Choppy with > 2 Down Years 0.0
My EPS Score 0.5

TOTAL FUNDAMENTALS SCORE: 1.0

THE RATIOS

Return on Equity

GE - ROEClick to Enlarge

Return on Equity Scoring

Criteria Scoring
Above 15% for Last 5 Years 1.0
At Least One Year Below 15% in Last 5 Years 0.0
My ROE Score 1.0

Other Ratios

Ratio Criteria Value Score (Pass=1 / Fail = 0)
Debt to Equity < 0.50 3.86 0.0
Payout Ratio < 60% 50% 1.0
Credit Rating > BBB+ AAA 1.0
Total Ratio Score
-
-
2.0

TOTAL RATIOS SCORE: 3.0

DIVIDEND DATA
Annual Dividends

GE - DividendsClick to Enlarge

Dividend Scoring

Criteria Scoring
25+ Years of Dividend Growth 1.0
10+ Years of Dividend Growth 1.0
< 10 Years of Dividend Growth 1.0
My Dividend Growth Score 2.0

TOTAL DIVIDEND GROWTH SCORE: 2.0

STOCK VALUATION

Valuation Metric Criteria Value Score (Pass=1 / Fail = 0)
Dividend Yield Cur Yld > 10 Yr Avg Yld 2.1% 1.0
Div Yld Compared to SPY Div Yld Cur Yld > SPY Yld (0.25) 3.6% 1.0
P/E Ratio Cur P/E < 10 Yr Avg P/E (1.0) 15.9 1.0
Relative P/E Relative P/E < 1.0 0.60 1.0
Price to Sales < 1.5 2.07 0.0
Total Ratio Score
-
-
4.0

Canadian Shareowner’s Association Stock Selection Guide Software Buy Price

Buy Zone
 Maybe Zone
 Sell Zone
 Current Price Rating Scoring (Buy=1.0, Other=0.0)
$24.02 to $34.51
$34.51 to $44.99
$44.99 to $55.48
$34.31
Buy
 1.0

TOTAL STOCK VALUATION SCORE: 5.0

SUMMARY

Points Earned:

11 out of 14

The stock is rated HIGH with 11 points earned through my analysis of the stock. As I currently own GE and am not looking to add to my portfolio at this time, I am goind to do nothing. However, I would be open to adding to my portfolio if my asset allocation called for more U.S. equity.

Rating Points Required
High 11+ points
Medium 8-10 points
Low < 8 points

Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.

The Dividend Guy owns shares in General Electric (GE)


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5 Comments so far

  1. Dividendgrowth January 23, 2008 9:35 am

    I think that GE is a great company if you are investing for dividends. With its dividend growth rate of 8.75% over the past 5 years your dividend income has defintely risen more than inflation.

  2. Stocks on Sale » Dividend Stock Wednesday: General Electric (GE) January 23, 2008 11:09 am

    […] skunks wrote an interesting post today onHere’s a quick excerptThis is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis. … […]

  3. Lily January 23, 2008 11:38 am

    I think I just figured out that I’m a closet dividend investor.

    Also, it’s reassuring to know (especially in today’s market environment) that my portfolio doesn’t suck, or at least other people hold the same stocks. :)

  4. 73rd Edition of the Festival of Stocks | My Adventures into The Street January 28, 2008 10:21 am

    […] Dividend Guy presents Dividend Stock Wednesday: General Electric (GE) posted at The Dividend Guy Blog, saying, “My personal analysis of General […]

  5. Investment Ideas from My Fridge » The Dividend Guy Blog February 2, 2008 8:48 am

    […] dividend and they now sport a 3.5% dividend. I am going to have a look at them during on of my weekly stock analysis posts in the […]

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