In this segment from the Industry Focus: Energy podcast, Sean O'Reilly and Tyler Crowe talk about what might make General Electric (NYSE:GE) so appealing to investors -- from its solid work toward shedding off GE Capital's SIFI designation, to moving into renewables, and more.
A full transcript follows the video.
This podcast was recorded on April 22, 2016.
Sean O'Reilly: Given GE's shift that they're in the midst of making toward getting back to their roots of being a good old American manufacturer, I don't think I'd be going out on a limb to say they're a decent bet if you want to get in on the alternative-energy, high-value manufacturing game.
Tyler Crowe: They are doing a lot of things that are very impressive. They are really trying to divest themselves from GE Capital. They said in their release there are about $166 billion worth of that has been divested. They're a little ahead of schedule on that. When they get rid of all these GE Capital that are kind of ancillary to the typical financing arm that you'd see at a Caterpillar or John Deere, or something like that, to help fund the purchase of a major piece of equipment -- once they get rid of that, they're going to be able to get rid of their SIFI designation, basically saying they're too big to fail as a financial institution.
O'Reilly: We don't matter to the financial industry anymore.
Crowe: Right. They want to get rid of that. In doing so, they free up a lot of their capital and cash and things like that, that they can then return to shareholders that are looking at doing a massive buyback, a sizable dividend increase. Once that capital aspect of it and they get back to being a true industrial manufacturer, and you look at those numbers, they're becoming a pretty good industrial manufacturer again. Things do look very promising for GE. Like Caterpillar, GE is another thing that I have been watching pretty attentively as of late.
Sean O'Reilly has no position in any stocks mentioned. Tyler Crowe has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. The Motley Fool is short Deere & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.