GE’s dividend plan remains unchanged

November 13, 2008

There has been speculation in the media and among analysts recently about GE’s dividend. Here are a few facts:

* GE has paid a dividend each quarter for more than 100 years.
* On Sept. 25, GE stated that its Board of Directors had approved management’s plan to maintain GE’s quarterly dividend of $0.31 per share, totaling $1.24 per share annually, through the end of 2009. That plan is unchanged.
* GE expects cash flow to be greater than the amount needed to fund the dividend in 2009.
* GE has taken a number of steps to strengthen its liquidity plan, including participation in the U.S. Government’s Commercial Paper Funding Facility (CPFF) and FDIC’s Temporary Loan Guarantee Program (TLGP). Both of these government programs provide additional levels of security for our investors, strengthen our ability to support the planned dividend in 2009, and do not place any restrictions on our dividend policy.

Learn more about GE’s dividend history on our Web site.


This entry was posted in Financial Markets, GE Capital, Investors. Bookmark the permalink.
  • Dan

    Thank goodness!

  • John

    For sure, I live off the dividends, no dividends means soup kitchen for me.

  • Gail Heid Pecora

    I’m not worried about General Electric.

  • charveys

    I’m not so sure it’s a good thing. On one hand the company borrows 5 billions from the US taxpayer through the CPFF to run operations, and on the other they insist on paying a dividend. I’d prefer that they stop paying it until the situation gets better.

  • Thor

    I’d like to know when the dividend will actually be paid.

  • bill burke

    Iam a stockholder and love your blog.However it is hard to read ,the blue and white background is terrible. I am 77 years old and read most things easily but your format is annoying.

  • Steve Schumaker

    This statement is forward looking. The reality is that sales have to be booked and suppliers have to be paid. The big question in my mind is does the management the risk mitigated on the debt it has issued?

  • doug wilson

    i sure hope ge doesnt lower dividends i think it would have a very negative psycological effect to the broad stock market bad enough after 32 years no dividend increase aaa status wont mean a whole lot if dividends get lowered but on the plus side shows responsible management when you see the leaders plow their own money into it so have i i believe in what the company produces value

  • elaine w cary

    Thank God for GE – I am the third generation to receive dividends since my Grandfather was paid in the stock back in the early third of the 19 hundreds.

  • Richard Wehle

    When are GE dividends paid?

  • Richard Wehle

    Sorry, I should have read closer. Question was answered above. Thanks

  • RONALD TAMOSCHAT

    GE IS COMMITTED TO MAINTAINING THE DIVIDEND THROUGH 2009. WHAT ABOUT AFTER THAT ? AS WITH MANY GE RETIREES , THE DIVIDEND IS AN IMPORTANT PART OF MY INCOME STREAM. THE LACK OF REASSURANCE AFTER 2009 MAKES ME NERVOUS. RON TAMOSCHAT.

  • Jean Paul

    From France :
    Stockholder in GE and other Dow Jones company. In the DOW JONES some corporation are much more better.
    Why ?
    Is investiments in China are Profitable ?
    Can GE make greatS marketingS operationS in EUROPE for wind energy ?

  • Old Man Grump

    I’m worried about what happens in 2010. Surely GE will not pay a dividend rate of 7.7%+ for long. It can’t sustain that much dividend payout. i like so many others retired after 33 years of GE service and depend on that dividend for retirement funds. Holding my breath that Obama & Immelt turns things around.

  • Richard Krauser

    How come GE hasn’t announced the Dec. ex-dividend date yet? The previous dividend declaration date was 08/22/08, which is more than 3 months ago.

  • Bill

    The 7.7% dividend rate is a percent of the stock price. Your concern should be that their earnings per share is greater than the $1.24 that they pay back.

    If they ever get back to a normal P/E ratio the stock price should be double what it is today.

  • Corry Kelly

    Please do more to disspell rumors and misinformation about GE. Perception can drive stock down.

  • Eric 9

    I want to build on GE over the long term, say nexy 10 years. Is now a good time to buy lots of shares?

  • jerrold winger

    GE’s strategic return to technology away from financial businesses is a welcome return to its roots. Read my book, The Delta of Technology, where GE is profiled.

  • Willard Duvall

    Where is the dividend announcement its Dec 10th?

  • Roger Dyer

    What is the ex dividend date for this 4th qtr?

  • David Tan

    GE BOD last action on dividend was on 8/22/08 with an ex-Div. date of 9/18/08 for 31 cents. Does anyone knows of any action taken/announced by BOD for this qtr.? I hope the dividend is secure as I have not read/heard any action taken for 4Q’08. Should have been announced already if one extend approx. 3mths. from the last BOD action, or around the end of Nov.’08

  • Ronald Hitzler

    When will I receive a date on the dividend. Thanks

  • c. Braun

    What is x-dividend date and payment date for
    4th Quarter 2008

  • don

    great web site. easy to read and user friendly.
    the dividend is now the backbone of the company as far as investors are concerned. Hope G.E. makes every effort to keep giving it and even increase in maybe in 2010.

  • Gary Nelson

    For everyone worried about the dividend, did you know you can make more selling covered calls every two months? I sold Feb. 19′s today for .30 do this 6 times a year you have 1.80 Ver. 1.21

  • Sriram

    Do we publish the GE 2020 and GE 2040 framework at any frequency? The framework is the compass driving dividend decisions. Thank you.

  • johnny

    rrRyVG Thanks for good post

  • Rita

    x-dividend date for fourth quarter 2008 12/24
    pay out 1/26/2009

  • mark stofan

    keeping the dividend at $1.24 in 2009 is key. GE has taken many hits due to its various misses…..i am very glad that GE is supporting the dividend in 2009. now the words need to be followed up by action – and not excuses…..

  • Joseph Rutigliano

    keep the dividend and you keep me

  • dan baldwin

    does ge have any plans to spin off consumer and industrial division in the future?

  • Yogesh

    Maintain dividend, for which good business and management are a must. Dividend maintenance also reflects well im the investment community, gaining its confidence. Let it be an excellent American company that the whole world can put trust in; i.e., ahead in technology and dependability. Management should neither lie nor mislead investors; i.e.,please be transparent. Best wishes and happy 2009.

  • John Van Der Wal

    From some of the comments I see that there’s a belief that GE is using federally-insured borrowings to support operations. This is not so. GE is using it to raise funds cheaply and then to loan them out at a profitable spread through its finance company, GE Capital. The result is higher earnings at GE Capital than otherwise would have been the case.

  • Hugo Drax

    I am collecting my covered premiums and dividends on GE and reinvesting both to compound over time and increase my ownership stake over time.

    I noticed GE sold 30 year notes at 400bps over treasuries and 2 year notes with very narrow spreads over the notes. Smart move, when inflation hits like it did the late 70s early 1980s GE will be positioned nicely taking on this cheap debt today and investing in assets during this deflationary period.

  • Beverley W. Bayar

    I am a Widow and certainly appreciate the dividend that I receive. Thank you GE!

  • VirginiaParrish

    What is covered calls?, & how do you do it? Dividends are great I use them to reinvest in the company. The stock is really cheap now a good time to get additional stock.Keeping the appliance division is a smart move. I really thought they were making a mistake sellng it.

  • Hugo Drax

    Covered calls means you take the obligation to sell GE stock at a specific time period and price, for the obligation you are paid a premium. The obligation can be short term (30 days or less, or longer 1 year or more) You get paid more "Time premium" the longer the contract life and the premium is higher if people are scared (ie the VIX is high etc..) If ge never reaches that specific price then you keep the premiums (the one who bought the calls, loses money) You can sell calls with intrinsic + time value or just calls with time value.

    You can also write puts if you want to buy GE at a specific price and get paid to do so. (ie GE 13 puts etc..) I also write puts as well. Warren buffet sells puts instead of using limit orders when interested in acquiring more shares.

    You should talk to your financial advisor and discuss options, they are not for everyone and there are risks involved with options.

  • Paul Milbank Sr.

    Hi, I’m retired and live off the GE Dividend in a trust that was setup for me. I not allowed to ever touch the stock. I can’t sell it or trade it. So the only income I have is my Dividend and my SS Check.

    If the Dividend is cut I don’t know what I would do. I don’t want to lose my home and my health care I pay for.

    All these stories about GE cutting the Dividend is making me very upset. This trust was supposed to help me until I die and now I’m so scared I can’t sleep and I cry at times. I worked for 65 years and after everything I’ve done I fear I’ll be thrown in the street. God help us please keep GE safe

  • Arabelle Hurst

    I can’t believe it — GE stock down to 12! If it continues do we end up papering our walls with stock certificates like they did in the 1929 crash. As long as they keep paying dividends, just hope the powers to be make the right decisions. The company is so diversified, but why is the price dropping so fast?

  • Anna

    It is dropping because a) Their financial arm is in a world of hurt and is dragging thier other (good & profitable) sectors down with it, b) Fear – stock price is only half financials; the other half is emotion c) People are shorting this stock to death. None of this is fair to shareholders. GE’s financial sector needs to lower its pride and accept help from the government.

  • Chris

    Anna,

    Unfortunately, you forgot "d) trust in communication" (and I’ve been a strong supporter of Mr. Immelt and GE for a while now — especially given the environment we’re in).

    These are mixed messages and are hard to overlook from the most diehard of GE supporters:

    First (posted directly above):

    "On Sept. 25, GE stated that its Board of Directors had approved management’s plan to maintain GE’s quarterly dividend of $0.31 per share, totaling $1.24 per share annually, through the end of 2009. That plan is unchanged"

    Second (yesterday):

    GE’s Immelt: Important to Not Cut Dividends
    http://www.marketwatch.com/video/asset/3DD08ADE-F4D9-4817-AE0D-646AC7F6A6C3

    Third (today):

    "The board and I will continue to evaluate the company’s dividend level for the second half of 2009 in light of the growing uncertainty in the economy, including U.S. government actions, rising unemployment and the recent announcements by the rating agencies."

    How are we supposed to read that? This is exactly what shareholders can’t live with. We want straight talk, and a firm commitment one way or the other. I appreciate you giving us the dividend this quarter but you can’t keep saying/posting one thing and doing another reiteration a day or a few days later. How are we supposed to trust that kind of wishy washy rhetoric?

    Do you or don’t you know if you have the cash to pay the dividend this year and honor your previous commitment of "through the end of 2009?" Do you have a firm grasp of the balance sheet and the necessary protections in place to protect the company and shareholder equity?

    We’re mature adults, all we want is straight and honest communication. AS shareholders, we deserve that much!

  • SBM

    GE is borrowing to pay Dividends – this is extremely short sighted fiscal management. They are REALLY hoping things turn around, else the Dividend is gooooone.

  • Chris

    I guess the question now, that I would like answered by the Board and gereports.com is:

    Where is the dividend headed for 2010 and 2011? How much are things improving? I didn’t see comments on this in early Sept when they announced the dividend that is ex today.

  • retiredsquid

    Home many see that in order to help maintain our economy to buy AMERICAN products. We ALL helped in bringing down the economy. At least I admit it….Made in china, Taiwan, Japan and everything else is OVER
    for me….. I want my grandkids to have a good life.