Please ensure Javascript is enabled for purposes of website accessibility

Free From Its Financial Shackles, General Electric's Stock Is Looking Attractive

By Motley Fool Staff - May 8, 2016 at 12:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

General Electric has been slowly getting back to its roots as an industrial manufacturer, and it's paying off for investors.

In this segment from the Industry Focus: Energy podcast, Sean O'Reilly and Tyler Crowe talk about what might make General Electric (GE -0.03%) 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$63.67 (-0.03%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.