3 Reasons to Buy General Electric

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No matter what's going on in the market or a specific company's history, there are always reasons to consider buying shares in a business. After all, some of the best opportunities in stocks are born from historically bloody times.

Motley Fool CAPS hosts a boatload of opinions from more than 120,000 members who give good reasons to own -- or sell -- a stock. Our members have cast their votes on nearly 5,400 stocks.

In the case of bellwether industrial giant General Electric (NYSE: GE), 11,258 members have given a bullish or bearish opinion on the company. Of the detailed information packed into the pitches and other comments, here are three of the top reasons investors give to buy GE today:

Diversified businesses: Many investors appreciate that GE brings in earnings from a broad range of industries. In its most recent quarter, most of its segments enjoyed earnings growth, including a 31% increase in its energy infrastructure division. While GE's finance unit suffered a 33% drop in earnings, this compares well to aftershocks from Goldman Sachs' (NYSE: GS) 71% drop, or Wachovia's (NYSE: WB) pure disintegration.

Top brand: Over the course of a century -- and then some -- GE has developed a strong reputation with consumers and investors as a high-quality company along the likes of Johnson & Johnson (NYSE: JNJ), Nike (NYSE: NKE), and Microsoft (Nasdaq: MSFT). The top brand and decades of success are core traits that attract long-term investors like Warren Buffett -- especially when the stock gets cheap.

Resilience: Nothing seems to boost investors' confidence more than a long legacy of success. Like 3M (NYSE: MMM), GE has survived through many up and down cycles. But simply saying it has survived doesn't do it justice -- GE has produced 16.3% annual returns over the past 40 years. With huge global energy opportunities, GE is also looking at lots of new growth in the areas of water, nuclear, and wind technologies.

Of course, there's a lot more devil in the details of these buy-side opinions, and that's why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about GE, just head on over to Motley Fool CAPS and have a look -- it's all free, and your opinion is welcome, too.

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Fool contributor Dave Mock is looking for only one good reason to play hooky from work tomorrow. He owns shares of Johnson & Johnson and 3M. Johnson & Johnson is an Income Investor selection. Microsoft and 3M are Inside Value recommendations. The Fool's disclosure policy was still at the karaoke bar at 3 a.m. last night.

Comments from our Foolish Readers

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  • Report this Comment On November 11, 2008, at 11:57 PM, bisnettrj2 wrote:

    Evidence enough for me - GE said in its 3Q conference call that its dividend was safe, and at a 6.5-7% yield, this is damn-near a no-brainer. Yields twice the best one-year CD on the market (currently), and as long as it doesn't nose-dive due to its finance unit, you'll generate a short-term yield off the dividend and a long-term gain off the increase in stock price (when, if, and ever) the market improves.

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11/6/2009 4:00 PM
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