Oh, General Electric (NYSE:GE), I've got a confession -- I'm in love with you! Let me give you a few reasons why I'm so infatuated with you and your stock.
First, you are as diversified as any mutual fund. You have operations in the growing health-care industry; you make engines for airplanes and rail cars; you engage media opportunities via your NBC Universal asset, competing effectively with such companies as Disney (NYSE:DIS), Viacom (NYSE:VIA), News Corp. (NYSE:NWS), and CBS (NYSE:CBS); you want to help humankind by promoting new opportunities for energy generation such as the exploitation of wind power (which might also be useful for desalinizing water); you provide myriad financial services; and you supply important infrastructure technologies to emerging markets.
Second, you produce a lot of cash flow. For fiscal year 2006, you grew cash from operations (excluding dividends provided by GE Capital Services) by a solid 7%, delighting starry-eyed shareholders like me with $14.8 billion. Sure, some grumpy Wall Street types might scoff at a single-digit increase in cash flow -- but hey, I know it takes a lot for a big conglomerate like you to grow, and I think you're doing a wonderful job. I'll stick by you and your operational cash flow any day of the week.
Third, you use that cash flow to shower me with gifts, because -- and I blush just thinking about this -- you love me, too. Recently, you upped your quarterly dividend from $0.25 per stub to $0.28 -- that's a 12% increase! That's so awesome and so like you. In fact, according to CEO Jeffrey Immelt, your dividend has been steadily rising for more than three decades, and this latest change in the payment marks the third year in a row of double-digit appreciation. Oh, and it gets better: You spent more than $8 billion buying back shares last year. That also impresses me because reducing the outstanding share count aids in the creation of shareholder value.
I've got a crush on you, GE, and this isn't just some capricious, passing thing. I'm in it for the long term with you, baby. Just keep up the dividend increases -- I'll remain loyal, reinvesting them right back into you. Happy Valentine's Day!
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Fool contributor Steven Mallas owns shares of Disney and General Electric. As of this writing, he was ranked 10,739 out of 21,682 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
