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Nov 19 2019

Ge stock today




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Ge stock today-GE is the oldest component of the Dow Jones Industrial Average, having joined the index in 1896. Can it continue to thrive as a conglomerate?

Why GE Will Never Break Up

General Electric Co. (NYSE : GE) is the oldest component of the Dow Jones Industrial Average, having joined the index in 1896. It long ago outlived its then-contemporaries, bygone companies like National Lead and Standard Rope & Twine. Today, GE remains one of the few true conglomerates, with its fingers in multiple unrelated industries, everything from health care to aviation to its traditional businesses of appliances and lighting.

It is for that reason that many of its investors think the time has come for GE to do the honorable thing and break into multiple companies, each with its own economies of scale. Some dissatisfied shareholders think that might be the next logical step for a company whose commitment to diversity may finally have stretched it too thin.

GE Sell-Offs Brought More Splits

In recent times, GE has been an entertainment company, a computer maker and a heavy industry manufacturer. Today it is only the last of those, in addition to running several other businesses with differing ranges of profitability. To investors impatient with the movement of GE’s stock price, the obvious resolution would be to sell off the least profitable businesses and keep the highest-margin ones. The interconnectedness of those businesses is just one of the reasons why that would not be as easy as it might sound.

GE stock hit bottom in March of 2009, falling below $6 a share and irking investors who had become accustomed to the meteoric, if anomalous, growth of the previous decade. At the time, those investors began to call for the company to spin off some valuable, though troublesome, assets, and by and large, GE met the demands. Last year the company divested itself of its half-ownership stake in NBCUniversal, the parent company of the NBC television network and its various sister networks (CNBC, MSNBC et al.) Yet upon selling that stake to Comcast Corp.(Nasdaq:CMCSA), the company did the opposite of consolidating, going from four divisions to…eight separate business segments.

First, GE’s Energy division split into three – Oil & Gas, Power & Water and Energy Management (GE-speak for “electrification.”) The businesses that remain are Aviation, Capital, Health Care, Home and Business Solutions (i.e. dishwashers, refrigerators and light bulbs), and Transportation. Those businesses range from low- to high-margin, with the bread-and-butter of Home and Business Solutions bringing up the rear.

Past vs. Profits: What Should GE Dump?

Jeff Immelt, the CEO who had to contend with the laments of those unhappy shareholders, did not categorically deny last year that at least one GE business might, perhaps, be on the block. That would be GE Capital, which lends money for corporations needing to buy company aircraft, health care providers looking for buildings, businesses requiring lines of credit and even medical patients who want to pay for minor surgery with the equivalent of a credit card. GE has said it plans to spin off the consumer lending part of GE Capital, which issues store credit cards to 55 million consumers, sometime in 2014. The business, renamed Synchrony Financial, earned about $2.2 billion in 2012.

There is one slight problem: Even though its volume has declined since the late-2000s worldwide financial crisis, GE Capital makes by far the most money of any GE business. In 2013 GE Capital was responsible for more than one-third of GE’s gross profit. Here’s the breakdown by segment, in millions of dollars:

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Ge stock today

SOURCE: http://www.investopedia.com/stock-analysis/032514/why-ge-will-never-break-ge-cmcsa.aspx


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