The market has been on a slow but steady upward path over the last few weeks, with the occasional dip for a day. In light of this, I had some time to do some research and came to the conclusion that General Electric would be a good candidate for my portfolio. It helps diversify my portfolio and I feel like they have learned their lesson with the GE Capital debacle a few years back.
Thursday I pulled the trigger and bought 50 shares at a cost basis of 27.25. I could have waited and bought for a lower price, but if I could tell the future I would have been a millionaire a long time ago =) Even though the market is higher than I would like, I still want to make sure I purchase(add) at least 1 to 2 positions a month. This does not account for any Loyal3 purchases through savings in my budget and dividends paid in that account. Those will be invested ASAP.
GE and I have a little bit longer history than a few days. I purchased GE back in 2008 during the financial crisis not long before they cut their dividend and dropped in price. I luckily sold the position for a minor loss prior to this event. What was the catalyst you wonder? Did I do my due diligence and realize a dividend cut was coming? Well no, I had some qualms about who they were doing business with at the time and fired them from my portfolio because of that. It was fantastic timing, but had nothing to do with what was about to happen.
GE has been on my mind lately. With doing all the housework and wondering what type of energy efficiency efforts I could make. The first time that comes to mind is to change the light bulbs. GE invented the light bulb back in the day, what a bright idea! Luckily, the previous home owners were fairly energy conscious so I don’t have that many bulbs to change. Plus, I am probably going to wait until they start to burn out, why spend money until you have to?
My house was built in 1955 and updated at some point in the past. No idea, but I know that my HVAC system (air condition/heater) is old and will probably need to be replaced in the next few years, as well as the oven. Luckily, GE makes a wide variety of Energy Star related products for the home consumer. Including fridges, ovens and air conditioners.
On the business side, I thing GE (as well as other industrial/technology companies) are posed to do well as the economy picks up and companies reinvest in their businesses. The economy is going well around here and my company is pretty close to a refresh cycle on their PCs and there is a lot of construction in my area.
GE itself is very diversified. They have their hands in Healthcare, Software, Oil &Gas, Power generation (Wind turbines! Going up like crazy in West Texas) and much more.
Even though GE has been on my mind. It has met my entry criteria and subsequent analysis.
- Dividend growth: > 3years
- Dividend yield: > 2.5
- FCF Payout Ratio: < 60
- Net Issuer of Shares? : No, buying back.
- PE < 20: Yes, 18.99
- Debt?: Looking good. Long term debt has been dropping over the last 5 years.
Revenue has held pretty steady over the last three years. I would like to see this rising, but I am not concerned enough to avoid a small position at this time.
I have added a Blog Roll. These are the blogs I follow and read regularly, even if I don’t do much commenting. I haven’t fully completed the list, so I will be adding more as time allows. Instead of doing an analysis of GE above, I thought I would include some of my favorite bloggers posts. I use these to expose me to different dividend stocks. I do not however, use these as a sole source of information or to make a decision.
Dividend Mantra: A little older post, but a good one
Compounding Income makes another weekly purchase of GE.
The Dividend Engineer provides some useful information about GE.
Time for painting.
Well, I would like to continue pointing out some great blogs and talking about stocks, but I got fed up with some of the dings in the walls the previous home owners left and I am in the process of painting the bedrooms. I started last weekend, did nothing during the week and need to finish up today. Otherwise, I will continue sleeping on my couch, which is comfy but it would be nice to actually use those rooms and all.
Disclaimer: Long GE