Skip to main content

The Globe and Mail

GE hikes dividend 12%, boosts stock buyback plan

A General Electric Co. logo appears on outlet converter packaging in this file photo.

Lisa Poole/AP

General Electric Co. on Friday raised its dividend by 12 per cent, with the higher payout starting in January, and it also authorized the buyback of another $10-billion (U.S.) in shares.

GE, the largest U.S. conglomerate, did not follow on the heels of other big companies including Caterpillar Inc. and Legg Mason Inc. that have pushed up their dividend payments into December, with an eye toward avoiding a rise in the tax rate on dividends scheduled to take effect in January unless lawmakers in Washington reach a budget deal.

GE company raised its quarterly payout to 19 cents per share. The board's share repurchase authorization is in line with GE's goal of buying back all the additional shares it issued in 2008 to raise cash in the face of the financial crisis.

Story continues below advertisement

"Returning cash to our shareholders remains a top priority," said Chief Executive Jeff Immelt.

From July 2010 through December 2011, GE hiked its dividend four times by a total of 70 per cent, in a move aimed at making up for a sharp cut during the financial crisis, when the quarterly dividend was slashed to 10 cents (U.S.) per share from 31 cents.

Friday's dividend hike comes one year after the prior increase, marking a return to GE's historic pattern on raising its payout.

"Investors need to realize the outsized dividend hikes that came following the cut during the crisis are over," said Jeff Sprague, analyst at Vertical Research Partners. "The dividend should track earnings growth from here."

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨