GE Announces Much Anticipated Dividend Increase
- July 23, 2010
- Dividend Aristocrats, Dividend News, Dividend Stocks
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General Electric (GE: 19.13 -0.57%) announced today that the conglomerate will finally increase their quarterly dividend by 20% to $.12 per share.
Investors have been anxiously waiting for a dividend announcement and we recently highlighted the much anticipated dividend increase from GE as one of the biggest dividend stories of 2010. The dividend increase pushes the yield on General Electric’s stock to 3.1% based on today’s closing price.
A former dividend aristocrat, GE cut their dividend last February by 68%. The move was estimated to save the company nearly $9 billion per year, but was the first dividend cut for the company since the Great Depression. The stock has risen over 70% since that time and the company is clearly more confident in their future cash flows now.
“We are able to restore the GE dividend at a historical payout level for 2010 earlier than previously anticipated and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010,” GE CEO Jeff Immelt said. “In addition, the Company continues to plan on capitalizing on strategic and financially attractive inorganic growth opportunities.
“We are executing well, progressing on our plans to make GE Capital a smaller, more competitive specialty-finance company, and continuing to generate strong cash flow,” Immelt said. “This gives us the flexibility to allocate capital for growth and shareholder value, while keeping GE safe and secure.”
The dividend increase surprised some investors, as GE CFO Keith Sherin had cautioned in March that a dividend increase might not come until 2011. The dividend news helped push GE shares up 3.3% today.
The increased dividend will be payable on October 25, 2010 to shareholders of record as of September 20, 2010. The ex-dividend date is September 16, 2010.
In addition to the dividend increase, GE is also extending their existing share buyback program through 2013. The company had suspended stock repurchases in 2008 and has about $11.6 billion remaining on the current program.
