Buy GE?

[TeeRuh]

I'm not really an individual stock holder (other than a bunch of MegaTech that I am trying to judiciously move out of), but would be tempted to buy GE today. Those that are more knowledgeable (all); make any sense? (I did look at their new forecast and the size of their "miss"; don't see the situation as justifying a 10% drop in price.)

Just a learning exercise;
t.r.

 

[StJohnsWood]

I've been a GE stock holder for over a year. I'm in the DRIP. While I'm not happy about the $4.00 drop this morning, I will continue to buy in the DRIP.

Plus with a $1.24 dividend the yield is 3.8%. $1.24/$32.75
Not to bad. One of the better ones.

 

[Zathras]

GE is a great income stock (dividend is around 3.5% I believe).
It isn't a high growth stock if that is what you are looking for. But as part of a dividend growth portfolio I think it is a great time to buy

 

[brewer12345]

Never liked companies so big and so complex that nobody could figure out what is going on inside. But if they sell off, GE's bonds might become interesting.

 

[FIRE'd@51]

I totally agree with Zathras. IMO, GE is exactly the type of stock one should hold in a taxable retirement portfolio, when it can be bought at this yield. At a yield of 3.8%, it is 120 bp above a money market fund, plus the dividend qualifies for the 15% rate. GE has raised the dividend every year for the past 32 years, and that increase has been considerably in excess of inflation.

 

[unclemick]

I totally agree with Zathras. IMO, GE is exactly the type of stock one should hold in a taxable retirement portfolio, when it can be bought at this yield. At a yield of 3.8%, it is 120 bp above a money market fund, plus the dividend qualifies for the 15% rate. GE has raised the dividend every year for the past 32 years, and that increase has been considerably in excess of inflation.

It's talk like that - that makes it hard to kill off my last file cabinet with 14 DRIP plans and transfer my remaining dividend stocks to my Vanguard broker.

heh heh heh - still watching GE, not buying, gotta keep a grip!.

 

[FIRE'd@51]

It's talk like that - that makes it hard to kill off my last file cabinet with 14 DRIP plans and transfer my remaining dividend stocks to my Vanguard broker.

heh heh heh - still watching GE, not buying, gotta keep a grip!.

Psst - better than Wellesley?

 

[kcowan]

GE is the ultimate "buy and hold" stock and the only company to retain its DJIA listing since the beginning.

 

[Running_Man]

http://www.valueline.com/dow30/f3807.pdf

Value line offers free looks at their Dow 30 sheets.

The positives: GE has Value Lines top Financial Strength rating and top Safety rating which makes the dividend very secure. Since 1998 the dividend has about tripled, while the stock price has gone nowhere now for 10 years. A dividend of 3.8 percent is very close to a needed withdrawl rate of 4 percent and the dividend should grow better than inflation over the long term.

The negatives: The dividend increase rate is decelerating and the earnings were a total negative surprise. The reason for the price declines is the fear that there is more negative news to come as it is rare for negative earnings to be a one time event (GE Capital). GE has very heavy foreign exposure which should have greatly aided earnings. GE is more exposed to the credit process than other industrials (which is why I prefer KO a less risky stock with a dividend of 2.5 percent) Operating margins as reported by Value Line have been dropping for 4 years and are expected to continue dropping.

Overall as one of the large stocks that got vastly overpriced by the S&P500 index boom of the late '90's it is back to a price range of where it had been prior to the explosion of it's price. As a dividend generator I prefer the lower dividend with better growth prospects of KO which are free of any financial stock risk. I would prefer to wait to see GE rise above yesterday's close to assure me that the market views the stock as OK and collect the dividend from 36.75 per share at 3.4% as opposed to trying to stretch into the uncertain for an additional .4%

 

[unclemick]

Ok guys - cut it out now - KO is another on my watch list which I have never bought either.

Dang - I gotta stop reading this thread - my hormones are starting to flare up!

heh heh heh -

 

[CyclingInvestor]

My portfolio is all in individual stocks (14 currently, including GE and KO). I
consider the 12% drop today an irrelevant bump in the road. The earnings drop
which triggered it is more interesting, but I have kind of been wondering if and
when it might occur, since such a large part of GE is its financial arm. Looks like
they were not fully immune after all.

 

[Gsquared]

It was enough to convince me to drop a few bucks on them this morning. To do so, I had to break a long-standing individual stock rule that I have: Don't buy if you don't believe in the product the company delivers.

In this case, I absolutely hate GE appliances based on past bad experiences. I justified breaking my rule in this case, as this is such a small piece of their overall business.

The dividend at 15% tax is awful attractive these days

 

[soupcxan]

GE's financial arm had been taking advantage of massive securitizations to pull income forward and to get access to cheap debt. Up until recently, that worked great. Now the game has ended and losses are increasing. I think they'll be back on track by the end of the year.

Having said that, I think there will be continued demand for their industrial products, particularly in the energy sector. They are also well positioned to benefit from a weak dollar.

 

[brewer12345]

GE's financial arm had been taking advantage of massive securitizations to pull income forward and to get access to cheap debt. Up until recently, that worked great. Now the game has ended and losses are increasing. I think they'll be back on track by the end of the year.

Yup. If history is any guide, they will wait until the storm has passed and then puke out the financial operations now that they have mined all the embedded profits from it. Its what tehy did with their life insurance operations a few years ago.

 

[FinanceDude]

The only thing I have to add is there a MANY companies with WAY dumber folks running them than the folks at GE........

This too, shall pass. My business partner's main client base is retired GE folks, and none of them are calling to sell. Plus, I had 4 guys call me to BUY GE..........so there you go........

 

[jazz4cash]

yes

I don't associate GE with appliances. Fortunately, theit jet engines performance seems to be better than their dishwashers.

 

[jIMOh]

People

BY THE NUMBERS
GE, which also has media and finance arms, reported a profit of $4.3 billion, or 43 cents per diluted share, compared with $4.57 billion, or 44 cents, a year earlier. Revenue rose 7.8 percent to $42.24 billion.

GE had a profit and still dropped 10%+ today. Wow people's expectations must be out of whack if a company has similar results to what it had in the past and that is a BAD thing. They made a freak!n profit!

 

[ladelfina]

Hmmm... I can think of plenty of smart people who screwed up their companies.
Some even won Nobel prizes.

I was considering GE but am too skittish of anything vaguely involving "financing" at this juncture.

 

[Art G]

GE is the ultimate "buy and hold" stock and the only company to retain its DJIA listing since the beginning.

Actually, GE has been a TERRIBLE buy and hold stock over the last 10 years. April of '98 the stock traded around $29. Today it's $32. Add that to a dividend that has fallen over the years and you've got a pretty mediocre stock.

 

[jimnjana]

Actually, GE has been a TERRIBLE buy and hold stock over the last 10 years. April of '98 the stock traded around $29. Today it's $32. Add that to a dividend that has fallen over the years and you've got a pretty mediocre stock.

You are leaving out the 3:1 stock split and the dividend has not fallen either. ...

Jim

 

[soupcxan]

Add that to a dividend that has fallen over the years and you've got a pretty mediocre stock.

Are you on drugs?

21-Feb-08 $ 0.31 Dividend
20-Dec-07 $ 0.31 Dividend
20-Sep-07 $ 0.28 Dividend
21-Jun-07 $ 0.28 Dividend
22-Feb-07 $ 0.28 Dividend
21-Dec-06 $ 0.28 Dividend
21-Sep-06 $ 0.25 Dividend
22-Jun-06 $ 0.25 Dividend
23-Feb-06 $ 0.25 Dividend
22-Dec-05 $ 0.25 Dividend
22-Sep-05 $ 0.22 Dividend
23-Jun-05 $ 0.22 Dividend
24-Feb-05 $ 0.22 Dividend
22-Dec-04 $ 0.22 Dividend
23-Sep-04 $ 0.20 Dividend
24-Jun-04 $ 0.20 Dividend
26-Feb-04 $ 0.20 Dividend
29-Dec-03 $ 0.20 Dividend
25-Sep-03 $ 0.19 Dividend
26-Jun-03 $ 0.19 Dividend
26-Feb-03 $ 0.19 Dividend
27-Dec-02 $ 0.19 Dividend
25-Sep-02 $ 0.18 Dividend
26-Jun-02 $ 0.18 Dividend
27-Feb-02 $ 0.18 Dividend
27-Dec-01 $ 0.18 Dividend
26-Sep-01 $ 0.16 Dividend
5-Jul-01 $ 0.16 Dividend
5-Mar-01 $ 0.16 Dividend
27-Dec-00 $ 0.16 Dividend
29-Sep-00 $ 0.137 Dividend
5-Jul-00 $ 0.137 Dividend
8-May-00 3 : 1 Stock Split
6-Mar-00 $ 0.13667 Dividend
22-Dec-99 $ 0.13667 Dividend
28-Sep-99 $ 0.11667 Dividend
6-Jul-99 $ 0.11667 Dividend
4-Mar-99 $ 0.11667 Dividend
29-Dec-98 $ 0.11667 Dividend
28-Sep-98 $ 0.10 Dividend
6-Jul-98 $ 0.10 Dividend
5-Mar-98 $ 0.10 Dividend

 

[brewer12345]

Are you on drugs?

That would explain a lot.

 

[FIRE'd@51]

Dang - I gotta stop reading this thread - my hormones are starting to flare up!

Well, hormones took over! Sold some Jan 30 puts for 2.45. If I get assigned, I don't mind owning GE at 27.55 (4.5% yield). If the stock stays above 30, I'll have collected nearly two years worth of dividends in nine months with no cash outlay.

Then off to the golf club to hit some balls.

Oh, and BTW, Yankees-Red Sox tonight! What a day for the hormones!

 

[Dawg52]

Bought some GE a few months back to add some 'stability' to the stock portion of my portfolio. Heh heh, just show there is no such thing as a stable stock. But I am planning to hold for the long term. May buy a little more after the dust settles.

Now, time to forget stocks and get ready for a weekend of cold beer and the Masters golf tourney.

 

[rogersteciak]

Here is Morningstar's take on GE (they think it's a bargain):
Morningstar Video