Diversified conglomerate General Electric Company (GE) recently announced a 5% hike in its dividend payout to a quarterly payment of 23 cents per share or 92 cents on an annualized basis. The current dividend hike is the seventh of its kind in the last five years. The increased dividend is payable on Jan 26, 2015 to shareholders of record as of Dec 18, 2014.
Based on the closing price of $24.89 on Dec 12, 2014, the proposed dividend affirms a yield of 3.7%. A steady dividend payout is part of the long-term strategy of General Electric to provide attractive risk-adjusted returns to its stockholders. In addition, decent dividend increases at periodic intervals have been one of the company’s most attractive features.
The company had earlier hiked its dividend in Dec 2013, when it raised the quarterly dividend payout from 19 cents to 22 cents per share or from 76 cents to 88 cents on an annualized basis. Prior to that, General Electric raised the quarterly dividend payout in Dec 2012 from 17 cents to 19 cents per share or from 68 cents to 76 cents on an annualized basis. The company also increased its quarterly dividend in Dec 2011 from 15 cents to 17 cents per share, and from 14 cents to 15 cents in Jun 2011.
The company also has a share repurchase program in place, under which it repurchased approximately 9.5 million shares in third-quarter 2014. General Electric has consistently returned significant cash to its shareholders through dividends and share repurchases. During the first nine months in 2014, General Electric returned $8.4 billion to shareholders through $6.6 billion dividend payouts and $1.8 billion share buybacks.
General Electric is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content, and industrial products, the company serves over 100 million customers worldwide. Its segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital.
General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry that are worth mentioning include Carlisle Companies Inc. (CSL), Control4 Corporation (CTRL) and Research Frontiers Inc. (REFR), each having a Zacks Rank #2 (Buy).
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