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What Investors Should Know about General Electric's 1Q18 Dividend

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What Investors Should Know about General Electric's 1Q18 Dividend PART 1 OF 4

General Electric Declared 1Q18 Dividend

1Q18 dividends

On February 9, 2018, General Electric (GE) declared a quarterly cash dividend of $0.12 per share on its outstanding common stock. The company declared an equal dividend on December 9, 2017.

General Electric’s quarterly dividend is payable on April 25, 2018, to stockholders of record at the close of business on February 26, 2018. The ex-dividend date is February 23, 2018. GE has ~8.7 billion equity shares outstanding. The dividend payment of $0.12 per share will result in costs of over $1.0 billion for the company.

General Electric Declared 1Q18 Dividend

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GE’s quarterly dividend history

This dividend announcement is in line with the plan disclosed in General Electric’s investor update from November 2017. After this deep 50% cut in quarterly dividends, some are wondering how GE’s CEO Jeff Immelt managed to raise dividends. In December 2016, the company announced a 4% rise in its quarterly cash dividend from $0.23 per share to $0.24 per share. After John Flannery’s action-packed declarations, GE’s revised yearly cash dividend stands at $0.48 per share compared to $0.96 per share earlier.

General Electric increased its cash dividend from $0.22 per share in 3Q17 to $0.23 per share in 4Q14. After the financial meltdown of 2008, GE’s dividend took a severe beating when it slashed dividends by 50%. In the last five years, GE’s dividend growth has significantly come down from double digits to low single digits to negative growth.

ETF investment

102 ETFs have GE in their portfolios. The company makes up 3.9% of the iShares U.S. Industrials ETF (IYJ). Apart from GE, other big industrial companies in IYJ’s portfolio include Boeing (BA) with a 5.7% weight, 3M Company (MMM) with a 4.1% weight, and Honeywell International (HON) with a 3.4% weight.

In the next part, we’ll see whether the present free cash flow levels support the announced dividend.

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