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You've had your fill of turkey. You're stuffed to the gills with stuffing. And now, it's time to waddle on over to the mall and do your part to help rescue the Consumer Economy, right?

Not just yet. While "the economy" would certainly appreciate your effort, I've got a better idea: Pay yourself first.

Stock circular
As deeply as retailers are discounting their wares this year, Mr. Market has slashed stock prices to an even steeper extent. For proof, look no further than the running tally of the nation's largest stocks by market cap:


Market Cap

CAPS Rating

ExxonMobil (NYSE:XOM)

$385.6 billion


Wal-Mart (NYSE:WMT)

$208.2 billion


Procter & Gamble (NYSE:PG)

$188.4 billion


Microsoft (NASDAQ:MSFT)

$175.1 billion


Johnson & Johnson (NYSE:JNJ)

$161.9 billion



$148.4 billion


General Electric (NYSE:GE)

$147.2 billion


Source: The Online Investor, 20 Largest U.S. Companies By Market Capitalization. As of Nov. 21, 2008.

You'll notice GE clinging to the bottom of this list. Yet just five months ago, GE held the No. 2 slot, right behind ExxonMobil, boasting a market cap nearly twice as plump as it has now.

How the mighty have fallen
It boggles the mind to say this, but right now, GE can be purchased for almost $140 billion off last June's already discounted price. But what's inside the box, you ask? Let's take a look.

Open-box sale
GE lowered its guidance in September, then reaffirmed that guidance last month in its third-quarter earnings report, assuring us it's "on track to meet our September 25 revised guidance for the full year." To wit:

  • "Industrial earnings," meaning the parts of the business being spared the brunt of the credit crisis, were up 12% over last year's Q3.
  • "Financial services," being the parts of the business hardest hit, will nonetheless earn "over $9 billion for the year."
  • And GE as a whole is "on track to earn approximately $20 billion in 2008."
  • As a further expression of confidence, GE committed to keeping its dividend intact at $1.24 per share through at least 2009.

So what's in the GE box? Oh, just one of the mightiest industrial conglomerates on the globe, selling for a P/E of about 7, even though core operations keep growing in the double digits.

Anything else?
Well, there's the little matter of the 7.9% dividend. And don't forget, as good as GE looks under GAAP, it's actually more profitable when you peel back the income statement and take a gander at the cash flow statement. There, you'll find that whereas GE is "earning" $20 billion a year, it's generating more than $28 billion in free cash flow.

Basically, GE's in fine financial fettle as is. But what about growth prospects? Analysts will tell you that the company can grow its earnings at better than 10% per year over the next half-decade. But GE might do even better. Consider a few of the growth industries it's involved in today:

  • Water: Drink much? GE is No. 2 in water treatment -- not a bad business to be in, in a world of melting ice caps and disappearing snowcaps.
  • Nuclear: Drive much? The recession's got oil prices down today, but if you think they're staying down long, I've got a primo oilfield in Pennsylvania I'd like to sell you. Electric cars are coming, and GE knows how to build the nuclear power plants to charge 'em.
  • Wind: Chernobyl got you nervous? Perhaps I could interest you in some wind power. GE's the nation's largest vendor of wind turbines.

In sum, GE gives you a chance to own one of the world's mightiest companies at one of the market's lowest valuations. To lock in a simply incredible dividend yield. To own a stake in the technologies that will solve global warming and the energy crisis. All in one neat package.

Has Christmas come early, or what?

Is GE a gift-wrapped present, or a lump of coal? Rate GE on Motley Fool CAPS, and tell us what you think.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.