GE Five minute analysis
September 23, 2008 9:26 pm by Dean Morel
Only got five minutes for your first pass? So let’s see how GE stacks up.
We’re approaching those early 2003 lows despite earnings being 54% higher. This GE 16 year BMW chart shows there is plenty of room to run when sentiment changes.
Let’s quickly check some other metrics as all of the following are at long term lows:
- Price to book
- Price to free cash flow
- Price to earnings
- Price to sales
Earnings only once lower than the previous qaurter out of the last 30, which is when I stoped counting!
Dividend is easyily covered with a 55% payour ratio. Since 2000 GE has raised their dividend every year. With the Forward Annual Dividend Yield sitting at 4.70% based on the current payout.
GE will report in early October and may provide some catalysts. Meeting or slightly beating earnings. Raising their dividend. Re-iterating that their financial arm is strong. Good growth in alternative energy.
Conculsion
GE may not set your portfolio on fire or provide mulit bag potential, but it should provide good returns with in built diversifications and exposure to alternative energy. A return to more ususal ratios for GE would deliver a 50% return. Add is some earnings growth and a dash of patience and I see GE returning 20% annual returns over the next three years.
Here is what happened for GE in Q2.
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