General Electric Company (GE) & More: Dividends from Industrial Giants

While Emerson took a top-line hit because of the 2007 to 2009 recession, management used the downturn and slow recovery to fine tune its business around the edges. For example, it sold three businesses in 2010 and 2011 and added several in 2011 and 2012. While none of the moves were material, they strengthened the company’s suit of offerings and culled out underperformers.

It is this type of activity that has led to more than 50 consecutive years of annual dividend increases. It’s also led to a premium valuation. However, a near 3% dividend yield is compelling reason to own an industrial giant that is constantly positioning itself for the future.

General Electric Company (NYSE:GE)

ABB and Emerson are both solid companies that continue to perform at the top of their game. General Electric Company (NYSE:GE), on the other hand, allowed its finance arm to tarnish its name in the recession. It got so bad that General Electric Company (NYSE:GE) took a government handout and cut its dividend.

Management has made a concerted effort to refocus on its industrial business in recent years, de-emphasizing finance and selling non-core assets like NBC. Today, the company breaks its business down into Power and Water, Oil and Gas,Energy Management, Aviation, Healthcare, Transportation, Home and Business Solutions, and GE Capital. It is making a concerted effort to reduce the size of its finance arm.

This is, basically, a turnaround story. In fact, General Electric Company (NYSE:GE)’s industrial businesses were never really a problem. So the opportunity is to get in at a still relatively depressed price as GE refocuses and rebuilds trust. The 3% yield is a solid reason to stick it out.

Working Smarter

ABB, Emerson, and GE all help companies work smarter through technology. They may not be as exciting as Google, but businesses wouldn’t run as well without them. And conservative investors would do well to consider adding any of these names to their portfolios.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Emerson Electric Co. The Motley Fool owns shares of General Electric Company.