GE: Too Tired For Growth, But Yield's Attractive

The New York Times “G.E.’s Appliance Deal Gets New Spin” and the press release “GE Announces Its Intent To Explore Strategic Options For Consumer & Industrial With A Focus On Spin-Off” imply that General Electric (GE) is struggling to be considered a growth company. I always thought GE was valued for steady earnings and a reasonable (currently $1.24) 4.5% dividend.

All this portfolio of businesses talk makes me think of a bad mutual fund. I don’t like hearing about changing the mix of businesses just for the sake of improving the overall portfolio’s growth rate. Revenue and earnings growth are more cosmetic than cash flow generation. I would like to see GE run for only one purpose – fat dividends for shareholders. In the current business climate, no financial alchemy will generate growth. Selling slower growing businesses to buy faster growing businesses is foolhardy. Unfortunately, this process is accelerating with CEO Jeffery Immelt.