Bloomberg News

GE’s Fourth Dividend Increase Since 2010 Boosts Payout 13%

December 12, 2011

(Updates with analyst’s comment in sixth paragraph.)

Dec. 9 (Bloomberg) -- General Electric Co. raised its quarterly dividend 13 percent, the fourth increase in less than two years as Chief Executive Officer Jeffrey Immelt returns cash to investors.

The dividend, which rose to 17 cents a share from 15 cents, is payable Jan. 25 to shareholders of record on Dec. 27, GE said today in a statement. The shares rose 3.9 percent to $16.94 at 2:40 p.m. in New York.

Analysts including JPMorgan Chase & Co.’s C. Stephen Tusa, Citigroup Inc.’s Deane Dray and Sanford C. Bernstein & Co.’s Steven Winoker have estimated in recent weeks a raise that would push the yield from 3.62 percent to above 4 percent, or about 17 cents a share. Bloomberg analysts also projected an increase of 2 cents.

“Our financial performance continues to accelerate,” Jeffrey Immelt said in the statement. “The GE business model will continue to deliver strong earnings and cash flow growth going forward.”

This week, executives told investors that they expect about $6.3 billion to $6.5 billion in net income from GE Capital Corp., evidence of a rebound from the market turmoil and economic slump of 2008.

“The dividend announcement is totally appropriate for where we are in the credit cycle and GECC’s earnings outlook,” said Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc. in New York.

GE cut its shareholder payout in February 2009 for the first time since the Depression to conserve cash as the global recession and credit crunch drained profit from the Fairfield, Connecticut-based company’s finance unit.

GE had $91 billion in cash at the end of the third quarter, after paying $3.3 billion in October to repurchase preferred stock sold to Warren Buffett’s Berkshire Hathaway Inc. as financial markets froze three years earlier. The Berkshire stake carried a 10 percent annual dividend, or about $300 million, and Immelt has said the redemption should boost earnings by 3 cents a share next year.

--Editor: James Langford

To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net

To contact the editor responsible for this story: James Langford at jlangford2@bloomberg.net


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