General Electric

More About General Electric

  • Was an original component of the DJIA
  • Was removed from the DJIA in June 2018
  • Historically was known for its consistent and growing dividend (until 2010s)
  • Known for being a technology leader in industrial segments: (GE INDUSTRIAL)
    • Gas & Steam Turbines
    • Electric Generators
    • Wing Turbines
    • Oil & Gas Services
    • Jet Engines
    • Locomotives
    • Lighting
    • Medical Diagnostics (X-Ray, CT, MRI)
  • Has a large financing arm (GE GAPITAL) (1/3 of business)
    • Finances new & used aircraft
    • Finances powerplant projects
    • Finances renewable energy projects

  • In the 2000s and 2010s was run by Financial Engineers
    • Jack Welch, Jeff Immelt & John Flannery
    • Through dividends and buybacks they returned ~225 billion to shareholders, but failed to invest in the business

General Electric Downfall

  • Morphed from it's industrial/technology base into a levered financial company over time (GE Capital)
    • Problems with GE Capital Assets (turning into unfunded liabilites) have dragged down the GE with it (2017)
  • Had to pay a $50 million fine to the SEC for improper financial reporting
  • Issued subprime mortgages through its' WMC unit (potentially fraudulent - being sued by justice department under FIRREA)
  • Held on to long-term-care insurance policies after spinning out Genworth Financial Corp in 2004
    • Those policies have turned into massive liabilities