Saturday, February 11, 2012


GE Holds Dividend Steady; Fourth-Quarter Hike Seen

General Electric said on Friday that its board voted to hold its quarterly dividend steady at 17 cents.

The largest U.S. conglomerate [GE 18.875 -0.255 (-1.33%) ] had raised its payout four times in 18 months, with the last hike coming in December and representing a cumulative 70 percent increase from the 10 cent per share level the company had slashed it to during the financial crisis.

The rapid pace of increases was intended as a signal that the company had regained its confidence after its GE Capital business had been hard hit by the downturn. But Chief Executive Jeff Immelt has said the Fairfield, Connecticut-based company eventually intends to return to its historical practice of raising its dividend once per year.

Analysts, on average, expect a 2-cent-per-share hike to 19 cents in the fourth quarter 2012, according to Thomson Reuters I/B/E/S.

The company is also waiting for the Federal Reserve [cnbc explains] , which last year became GE Capital's regulator, to give it the go-ahead to resume paying a share of GE Capital's earnings back to the parent company in the form of a dividend. Analysts have said that approval could clear the way for a larger dividend increase.

GE shares currently have a dividend yield of 3.6 percent, the fifth-highest in the Dow Jones industrial average [.DJI 12801.23 -89.23 (-0.69%) ], which has a 2.6 percent average yield.

No comments: