Tuesday, December 11, 2007

GE hikes dividend

As anticipated General Electric (GE) hiked its annual dividend 10% today at its annual shareholder meeting in New York, from $0.28 to $0.31 / share. I can't wait to update my spreadsheet.... Here is a brief dividend history for GE over the past few years:
  • 2004 = $0.80
  • 2005 = $0.88
  • 2006 = $1.00
  • 2007 = $1.12
  • 2008 = $1.24 (est.)

This represents a compound annual growth rate of dividends of about 10.5%.

GE also announced a $15B stock repurchase plan, as well as an estimate for 14-18% earnings growth for the fourth quarter of 2007, and at least 10% (quote '10% is in the bag') earnings growth forecast for 2008. GE promises safe and reliable earnings growth as the economy evolves. They also claim that because of their strong, globally positioned business led by infrastructure, they can grow revenues at 10% per year, despite a slowing U.S. economy. This is precisely the reason why I am bullish on GE, as I believe they are no longer a proxy or bell weather for the U.S. economy, but more of a global growth play.

The 10%+ EPS growth forecast disappointed analysts who had beefier earnings growth in mind for the company. The stock got hit right after the announcement, and subsequently recovered to close off 1%. GE also noted that they may sell or seek a partner for their private label credit card business in the U.S.

General Electric is the world's biggest provider of jet engines, power-plant turbines, medical imaging equipment, locomotives, private-label credit cards and aircraft leasing. Other divisions include water treatment, appliances, lighting and real estate.

This marks the 100th post on the moneygardener!

5 comments:

Jake said...

Congrats on the 100th post!

GE is certainly a consistent earner. I read Jack Welch's book, "Winning". He talked a great deal about aligning values at GE. There are many great stories in that book and I highly recommend it. It's incredible I never bought the stock!

-Jake (The Dividend Investing Blog)

4Life said...

In uncertain economic times, dividend increases from strong companies adds a degree of comfort that growth investors can't rely on.

Congrats on #100!

Best Wishes,
Dividends4Life

TKO from Ontario said...

Congrats on 100, 300 is better.

MG, GE is a foreign dividend stock. Could you kindly comment on tax implications in Canada for this and any other foreign owned stocks.

Cheers,

MG said...

Jake, thanks! I enjoyed 'Winning' as well.

4life, I agree and thank you.

tko, As far as I know US dividends are taxed net net as regular income for Canadians, and thanks.

Thicken My Wallet said...

Congrats on the milestone.

US Dividends are subject to 15% with-holding tax and not eligible for the dividend credit that Cdn. companies are.

In a RSP, the with-holding tax is waived.