09-01-2017, 08:50 AM
(09-01-2017, 08:01 AM)divmenow Wrote: I already own CVX but it needs to come down more before I add to it. But that is my favorite name in the sector Eric. XOM you put in that discussion as well. OXY a nice name as well. All very nice yields. You buying the name here?
GE is a great buy if your only buying for the yield, that is if they can sustain it. I just don't see much upside in the name over the next 1-2 years. GE with all the layoffs; word now is the new CEO may cut the dividend. Dividend news next week. Also Buffet sold out. But if the new CEO can make the necessary changes and they can hit those numbers then 2019 your looking at a PE of 14.79. In 5 years you have made $0 money in the stock price. $400 or so in dividends for your 100 shares. Next 5 years you predict Eric?
I haven't bought any more energy of late. I already have ~10% of my portfolio in energy and don't want much more exposure than that.
I think concerns about GE cutting the dividend are a bit overblown. They will simply drop the share buybacks to conserve cash if they need to. I really doubt they would cut the dividend again, it would destroy whatever shareholder goodwill they have left after cutting during the crisis.
GE is trading at a 15.8 PE on 2017 estimates, which is the lowest valuation of any industrial on my 30 stock watch list. Even if they do just half of the 11% earnings growth expected by analysts, you are still looking at a nearly double-digit annual total return over the next 5 years.
Management announced a targeted payout ratio of 45-50% with the most recent increase. So I think dividend growth will be minimal for the next year or two until the current 61.5% payout ratio works itself down. But with a 3.9% yield I'm content with slow dividend growth for now as I let my dividend reinvestment compound.
Sentiment around GE is horrible, and I'm in the minority with my opinion, but I still think GE is a quality company with great assets and will do just fine in the long run.