Submitted: August 15, 2010
Perhaps one of the world’s most famous companies is industrial conglomerate General Electric (GE
). The company is the world’s second largest public company with over 300,000 employees.
General Electric (GE
) has a rich history in America and the world, having been founded in 1890 by Thomas Edison under the name of Edison General Electric. It was one of the first companies to be listed on the Dow Jones Industrial Average in 1896. It still remains there 114 years later, and is the only company to achieve that feat in its original form and name.
It is perhaps the most diverse US listed company with what is believed to be the largest and most complicated tax return filed in the US each year, and has businesses which operate in the infrastructure, finance and media sectors across the globe.
Some of the businesses in the GE (GE
) stable include GE Aviation which is the world’s leading supplier of jet engines. Other interests include media groups NBC, Universal Studios and a minority stake in re-insurer Swiss Re (SWCEY
The company motto is "Imagination at Work", but for shareholders it is also a case of "Dividends at Work". GE (GE
) has paid a dividend each quarter for over one hundred years! Even during the heights of the financial crisis the annual dividend was paid.
) trades on a dividend yield of around 3.12% and a price to earnings multiple of around 15 times historic earnings.
Reporting second quarter earnings in July 2010, the company saw earnings per share growth of 15% year on year with earnings of $3.3 billion on revenue of $37.4 billion. Cash flow from operations for the year came in at $6.3 billion.
The results confirmed the Energy and Technology Infrastructure businesses performing as expected; while Home & Business Solutions and NBCU turned in good revenue and earnings growth, and GE Capital delivered 93% net income growth as losses have peaked and earnings are rebounding.
The company continues to generate strong cash flow, which is earmarked to be invested strategically to create shareholder value, while keeping the company safe. Management expects to grow earnings and dividends in 2011 and beyond.
While its dividend yield is perhaps a little lower than some of its peers, GE's (GE
) track record is enviable and its strong cash flows mean that investors score from adopting a long-term view on the business.