The industrial giant General Electric (GE -0.50%) wrapped up 2013 by reporting impressive earnings growth and a robust order backlog -- two promising signs for investors. In short, the turnaround that's been five years in the making continues to pick up steam.

Nevertheless, shareholders who felt shortchanged by management during the recession admit there's only one thing that can restore their faith: Raise the dividend; rinse and repeat.

For GE to re-establish itself as one of the bluest of blue chips, heady dividend growth must continue. Fortunately, GE's management team is well on its way.

A company led astray
As the saying goes, "Revenue is vanity, profit is sanity, and cash is reality." GE shareholders know this all too well.

For decades, General Electric accelerated revenue growth by investing in all stripes of businesses. At one point, management promised shareholders it could be the preeminent player in industries as disparate as light bulbs, movies, and natural gas turbines. If you're not seeing the commonality, well, that makes two of us. Whether executives were distracted or vain is irrelevant. GE was simply pursuing growth for the sake of growth.

At the same time, the century-old manufacturer went full throttle into banking in a race to boost the bottom line. As debt levels increased, so did returns on shareholder investment, to a point where GE's companywide return on equity surpassed 20%.

Those levels are atypical for a company of GE's size and ultimately proved unsustainable. As a result, so did GE's outsized dividend payment. When GE found itself entangled in the worst financial crisis since the 1930s, the company was forced to commit the ultimate sin and cut its dividend. On a per-share basis, GE's annual dividend payout shrank by half from 2008 to 2009, as shown in the following chart:

Considering GE's century-old dividend history, let's just say shareholders were none too pleased to watch their income stream fall off a cliff. Many investors jumped ship around 2008.

For those who stuck around, their message was clear: GE needed to return to its roots, and -- most importantly -- future success would be measured in terms of cash returned to shareholders. A consistent, growing dividend payout would be key for GE's share price to bounce back.

Back from the brink
In the five years since the fallout, GE's doubled down on its commitment to increase dividend payouts and share buybacks in a step-wise fashion. While the turnaround is far from complete, GE seems to have followed through on promises made.

Last year, CEO Jeff Immelt emphasized the importance of returning cash to shareholders: "We want investors to see GE as a safe, long-term investment. One with a great dividend that is delivering long-term growth." He elaborated on this mission in a section on capital allocation:

The top priority remains growing the dividend. Since 2000, we have paid out $106 billion in dividends, more than any company except [Royal Dutch Shell], and more than we paid out in the first 125 years of the Company combined. We like GE to have a high dividend yield, which is appealing to the majority of our investors.

The message is clear, but shouldn't the results speak for themselves? A look at the prior chart shows that GE is leaps and bounds ahead of where it stood in 2010. Since then, GE's shored up its balance sheet and reined in its financial arm, GE Capital. In only three years, GE's dividend has grown from $0.46 to $0.79 per share, a 72% increase. The company's approach is commendable as well.

GE's payout ratio, which represents the amount of earnings paid out to shareholders, stands at about 48% based on last year's earnings per share. Investors typically grow wary when a payout ratio creeps near 80%, a far cry from GE's current standing.

Furthermore, GE is tackling dividend growth from multiple angles. Management is focused on boosting organic revenue and expanding margins, thereby increasing earnings. At the same time, the company is buying back shares periodically to decrease the total outstanding to less than 10 billion. The following chart shows the multiple avenues by which GE is steadily redistributing cash to shareholders.

A Fool looks to the future
A half-decade into GE's turnaround, it's hard to be skeptical of the comany's progress. GE announced a dividend increase just last month to $0.22 per share, continuing a streak of six dividend increases since 2010. The preceding charts prove that GE's headed in the right direction in this regard.

Shareholders, by and large, won't be satisfied until GE to be a top-tier dividend stock once again, but that's to be expected. GE's become known for its ability to always shoot higher and push further. Even if the dividend returns to its peak in 2008, don't expect this company to rest on its laurels.

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